How a Small Group is Defined for Health Insurance Policies

The Affordable Care Act has divided employers into two categories: small group and large group. The act itself has a test that small business owners use to determine which category they fall under. There is a general dividing line at 50 full-time employees or equivalents, although there are some benefits specifically aimed at businesses with 25 or less full-time employees.

A business that employs 50 or less full-time employees falls under the small group definition. However, the full-time employee doesn’t necessarily have to be one individual. A business can have as many part-time employees as it wants as long as the equivalent number does not go over 50. In other words, an employer can have four part time employees working ten hours a week for a total of 40 hours worked. These four people working a total of 40 hours is calculated as one employee. There can be any variation on this theme to qualify for the small group coverage as long as the sum total is no more than 50 full-time employees.

If you are in the Redlands, CA area, or throughout California, and are interested in more information about health insurance policies for business owners, contact Bernardini & Donovan Insurance Services.


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