December 2, 2015

Clarification: Small Group (1-50)

The small group open enrollment period, established under the Affordable Care Act, is currently underway. From Nov. 15 through Dec. 15, Blue Cross and Blue Shield of Texas (BCBSTX) will accept NEW small group applications regardless of participation or employer contribution levels. (An enrolling small group must still meet all other business rules/requirements).

To determine if a group meets the BCBSTX small group market definition, please remember the following points:

• A small employer is defined as an employer who employed an average of one to 50 employees on business days during the preceding calendar year and employs at least one employee on the first day of the plan year. (An employee is any individual employed by the employer. This includes full-time, part-time and seasonal employees.)
  
  • If a company existed during the preceding calendar year and the average number of employees employed on business days during the calendar year preceding the effective date of coverage is one or more, the employer is considered eligible for group coverage.
    
  • Employers not in existence during the preceding calendar year must reasonably expect to employ one more employees on business days in the current calendar year to be considered eligible for group coverage.
    
• Whether an individual providing services for your business is an "independent contractor" (1099/Contractor) or an "employee" is a facts and circumstances determination. It requires the consideration of several factors including whether the business has the right to control what the worker does or how the worker does his or her job, how the worker is paid, and who provides the tools or supplies for the work being done.
  
  If you determine that an individual is not an employee, but rather an independent contractor, do not include that individual in your count of "employees."

• Individuals treated as a single employer under the Internal Revenue Code Section 414(b), (c), (m) or (o), should be treated as a single employer.

• If a company/employer is wholly owned by an individual (or an individual and his/her spouse), the individual or spouse should not be included in the employer size count.

• Partners in a partnership should not be included in the number of employees reported.
  
  While partners in a partnership should not be included in the number of “employees” reported, a partnership may establish a group health plan that provides coverage to partners and/or their dependents. Partnerships must be recognized as a legal partnership under the laws of the state in which they do business.

• An individual and his/her spouse, with no employees, may qualify for small group coverage only if they are recognized as a legal partnership under the laws of the state in which they do business. If the individual and his/her spouse is not recognized as a partnership – and they do not have any employees, they will not be considered a small group and therefore, must select an individual/retail plan for health coverage.

See examples that we have provided.

Final determination on small group status is determined by BCBSTX Underwriting. Please contact your Sales Representative with additional questions related to small group determination.