The general rule is that if an employer offers group health coverage to any full-time employees, the employer must offer coverage to all full-time employees (defined as those working 30 or more hours per week).
The employer also has the option of offering coverage to part-time employees (defined as those working 20 to 29 hours per week). If the employer offers coverage to any part-time employees, all of them must be offered coverage.
These rules apply regardless of the medical condition of the employees. In other words, an eligible employee can’t be denied coverage based on previous medical problems, otherwise known as preexisting conditions.
Below are more details regarding who can receive coverage under your business’s group plan.In addition, any dependents of eligible employees are also generally eligible for coverage under a group plan. Dependents include spouses, children, and in some cases, unmarried domestic partners. Dependents cannot enroll for coverage unless the employee has enrolled.
An employer can cover any employee who is on the payroll and for whom he or she pays payroll taxes. Although employees can opt out of the benefit program, virtually all insurers do require that a minimum number of your employees participate in their plan.
Eligible employees generally include those who are on paid vacation, maternity or sick leave. With few exceptions, employees who are on unpaid leave are ineligible until they return to active work.
The following individuals are usually not eligible for small group medical coverage:
- Employees covered under a collective bargaining agreement
- Employees of unrelated organizations
- Independent contractors
- Non-employee directors of the company
- Seasonal employees
- Temporary employees
Eligibility of Spouses and Children
Generally, coverage must be offered to an employee’s legal spouse and dependent children. Under the Patient Protection and Affordable Care Act, group insurance plans are required to extend coverage to adult dependents through age 26.
Employers may choose to expand the definition of child dependent to include children older than 26; age limits vary by plan. Check the evidence of coverage (EOC) booklet that you get from your insurer (or ask your agent or broker if you have one) to clarify definitions.
Eligibility of Domestic Partners
Employers may opt to extend health benefits to unmarried domestic partners of employees. If an employer chooses to offer coverage to domestic partners, the coverage must mirror the coverage extended to spouses.
Domestic partners can include:
- Same sex,
- Opposite sex, or
- Both same sex and opposite sex partners.
Employees and their domestic partners must sign an affidavit of domestic partnership to establish that they are living together in a committed relationship, and intend to stay that way indefinitely. The purpose of the affidavit is to deter roommates or others who simply share living space from defrauding the insurer.