Annual Enrollment Without Participation Requirements

Can’t Meet the Normal Small-Group Participation Rules?

Most California small employers that offer health insurance must meet the insurance company’s minimum rules for employee participation and employer premium contribution. When too few employees enroll, or when the employer cannot contribute the required amount, it may seem as though small-group coverage is not available.

Fortunately, there is a short annual enrollment window when an otherwise eligible California small business may apply without meeting the carrier’s normal participation or contribution requirements.

From November 15 through December 15 each year, this opportunity may help employers that want to offer group health insurance even when participation is lower than usual.

This annual enrollment period may be especially useful for:

• Small businesses with only a few eligible employees.
• Employers whose workers already have coverage through a spouse, Medicare, Medi-Cal or another health plan.
• Family-owned businesses that cannot meet the carrier’s normal participation percentage.
• Employers that cannot satisfy the usual minimum premium-contribution requirement.

The business must still qualify as a legitimate small employer and provide the required payroll, employee and business records. Applications should be started early because carrier paperwork and submission deadlines may vary.

This page explains how the November 15–December 15 annual enrollment period works, which requirements may be waived, what rules still apply and what existing small groups should know about renewal.

Instant California Small-Group Comparison – Quotes

Annual Small-Group Enrollment Period: November 15–December 15

An otherwise eligible California small employer that cannot satisfy an insurance company’s normal minimum employee participation or employer premium-contribution requirements may have an important opportunity to obtain small-group health insurance between November 15 and December 15 each year.

Under 45 CFR §147.104(b)(1)(i)(B), a health insurance company may restrict an otherwise eligible small employer that cannot meet its participation or contribution rules to this annual enrollment period.

• Enrollment window: November 15 through December 15 each year.
• Who may benefit: An otherwise eligible small employer that cannot meet the carrier’s usual minimum employee participation or employer contribution requirement.
• Other eligibility rules still apply: The business must be a legitimate small employer, eligible employees must be offered coverage, and the employer must provide the carrier’s required payroll, tax and business documentation.
• Apply early: Applications, employee forms, waivers and supporting documents should be assembled before the deadline. Carrier submission and effective-date procedures may differ.

Covered California for Small Business also provides an Annual Enrollment Period from November 15 through December 15 for otherwise eligible employers that cannot satisfy its usual participation or premium-contribution requirements. Its employer guide states that coverage obtained through this exception begins January 1.

Does This Rule Protect an Existing Group at Renewal?

Not necessarily. The November 15–December 15 rule primarily provides an opportunity to purchase small-group coverage when the employer cannot satisfy normal participation or contribution requirements. Existing groups should not assume that the exception automatically guarantees renewal with their present insurance company.

45 CFR §147.106(b)(3) and California Insurance Code §10713(c) allow a carrier to nonrenew small-group coverage when the employer violates a material contract provision concerning employee participation or employer contributions.

• A carrier may request payroll records, employee waivers and other documents during a renewal or eligibility audit.
• Renewal practices and correction procedures vary by carrier and may change.
• An employer receiving an audit or nonrenewal notice should respond immediately and verify available options before the deadline.
• If the current carrier will not renew the plan, the employer may be able to apply for another small-group plan during the November 15–December 15 annual enrollment period.

Need help reviewing your participation, contribution or renewal situation? Request California small-group quotes and provide an employee census so that eligibility and carrier requirements can be reviewed.

This information is a general explanation of small-group enrollment rules and is not legal or tax advice. Carrier underwriting requirements, deadlines and plan availability should be verified for the particular employer and proposed effective date.