Small Group Health Insurance Requirements

We often receive the question: What are the requirements for small business health insurance plans? Are there certain qualifications a company must meet to purchase a group health insurance plan?

Well here are your answers:

Group plans are run through an employer and require the employer to contribute 50% toward the employee's portion of the premium.  It also requires 75% of eligible employees to enroll in the plan.  Of those eligible by hours worked, if they were on a spouse's group plan, a VA plan, Medicare parts A and B or Medical Assistance plan they are taken out of the calculation to determine eligibility.  The minimum number of employees needed on the plan to start a group plan is two, but exceptions can be made for an S-Corp or C-Corp.

An employer usually has to have at least 50% of their employees living in the state where they are headquartered (i.e. Minnesota), but at least one carrier in Minnesota does not have the restriction.  Additionally, an employer has to be headquartered in the state of Minnesota in order to offer group insurance to employees.  If they are headquartered in another state but have a defined office in Minnesota, then the employer can normally insure those employees who office in Minnesota under a Minnesota based plan. 

If an employer has employees out of state, they can enroll in the group plan and have access to providers in their state.  In that scenario, the carrier will contract with a network to provide coverage in their home state. 

One thing about the health insurance industry is that there are always exception, loopholes and unforeseen restrictions that make carriers unique from their competitors.  Contact a qualified broker at MN Health Insurance Network to see if your organization is eligible for a small group plan!