Q: What Is the Small Group Special Enrollment Period?

The small group Special Enrollment Period is a once-a-year window when it’s easier for small businesses to offer group health insurance to employees. That’s because during this one-month period:

  1. Your business does not have to contribute to the premiums; and
  2. Only one employee needs to enroll to establish your group plan.

This means companies in the small group market can offer health coverage without spending any money.

It also means your employees can get access to group health insurance. This allows them to use pre-tax payroll deductions to pay for their premiums (as long as you have a cafeteria plan set up) and gives them access to the larger doctor and hospital networks normally associated with group coverage.

It’s similar to offering a 401(k) without a company match—but at zero cost. Employees pay for everything using their own money, but they save a ton because they aren’t paying taxes on their contributions.

This contrasts with the rest of the year, when group health insurance plans come with additional requirements. Usually, there are:

  1. Minimum contribution rules, which require employers to contribute a certain amount to the cost of the plan; and/or
  2. Minimum participation rules, which require a certain percentage of employees to enroll in the health insurance plan.

For example, in some states, health insurers can decline you for group coverage if fewer than 70% of your employees elect to have the coverage. (If an employee has other health coverage, like through a spouse’s plan, they’re not included in this calculation.)

That’s why the Affordable Care Act created the small group Special Enrollment Period to allow you to skirt around these requirements.

Awesome! When is the small group Special Enrollment Period?

The small group Special Enrollment Period takes place annually from November 15 to December 15, and it’s for coverage that kicks in on January 1.

For that one month each year, the participation and contribution minimums that usually apply can’t be enforced.

To take advantage of it, you must have everything finalized and all employees enrolled by that December 15 deadline. So if you want to offer health insurance benefits to your team under this small group Special Enrollment Period, make sure to chat with your broker ahead of time.

Anything else I should keep in mind?

While the small group Special Enrollment Period allows you to set up group health coverage without meeting the regular contribution and participation requirements, remember that:

  1. You can always contribute to your employees’ premiums if you want, and you can choose how much you want to contribute.
  2. Employees can choose to waive group coverage and get health insurance through the individual market or elsewhere instead.

Keep in mind that the amount you choose to contribute to premiums may impact whether your employees can get health insurance subsidies if they choose to waive group coverage and shop in the individual marketplace instead. This is nuanced, however, so you should review it with your broker before deciding on any specific contribution amount for your team. 

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