small group | Bernardini & Donovan

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.

As a business employer, there are several parts of the Affordable Care Act (ACA) that may affect your business and your group plan. Beginning in 2014, business owners with 50 full-time workers or full-time equivalents (FTEs), are considered a large group employer. As a business owner, the act requires you to offer affordable health insurance coverage to all of your full-time workers, as well as their dependent children, or be subject to penalties.

Am I a ‘large group’ or ‘small group’ employer?
If you are a business that employs at least 50 full-time employees or 50 full-time equivalents during the prior calendar year, you are subject to the play or pay penalties and the employer-shared responsibility provisions.

There is a one-time special six-month transition rule, which applies only for 2014, which allows you to use any consecutive six -month period in 2013 rather than using the full previous twelve months to determine whether you are a large employer.

What is a full-time employee or equivalent?
A common law employee who averages at least 30 hours per week or 130 hours in a calendar month is considered a full-time employee. You must calculate your hourly worker’s service hours based on hours worked and hours of earned paid leave.

If you are a California business in the Redlands or Inland Empire, and have questions about health reform legislation, and how it will affect your large group plan, contact the experts at Bernardini & Donovan Insurance Services.

Tag: small group

How a Small Group is Defined for Health Insurance Policies

How to Determine if you are Considered Large Group

let Bernardini & Donovan find the right plan for you

let Bernardini & Donovan find the right plan for you

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