New participation requirements for “Owner Only” enrolling small group health insurance

There are new participation requirements for OWNER ONLY enrolling small group health insurance in NY, and this might affect if these groups are eligible for coverage as a small group, or if they must enroll in the individual marketplace.

As per recent guidance issued by the Department of Financial Services (DFS) to qualify as a group eligible for coverage under Employee Retirement Income Security Act (ERISA), a group must have at least one common law employee who is both eligible for and enrolled in the coverage. If no “employees” are covered by the plan, an employee benefit plan does not exist. The ‘owner’ or the ‘owner’s spouse’ of the business, whether paid via W2 or K1, do NOT qualify as employees under this new guidance.

This guidance is being used by some carriers going forward, while others are still allowing just the owner to enroll in a plan as long as the other eligible employee(s) sign a valid waiver that they have health insurance elsewhere.

This is bound to affect both existing and new groups who are looking for, changing, or renewing coverage that get caught up in these new guidelines.  There are some workarounds we can suggest, however if you are one of this type of group we suggest you email us now or call (631) 207-1800 to discuss ways you can continue to be eligible for the small group market plans going forward.