Broker Check

Does It Matter When We Start Our Group Health Insurance Plan?

| May 26, 2023

   Group medical insurance being offered by an employer is almost expected in today’s world. When your next possible employee is contemplating their next job, their decision usually comes down to who has the best benefits or who contributes more towards these benefits. Some employers would like to offer medical insurance, but they don’t really understand the rules. Therefore, sometimes they get denied by the carriers. When you enroll can affect how many employees are required to participate in the plan for the employer to be able to offer the benefit.  

     During the Open Enrollment Period, which falls from October 15th through December 15th, you don’t need to worry about employee participation. That means you don’t have to meet any certain numbers as far as employees joining the plan, but you need to have at least two employees who aren’t husband and wife. As long as you can meet those criteria you should be able to get approved.  

     Many employers don’t know that you can start a group health plan at any time throughout the year. The start date usually must be the 1st or the 15th of the month. For the employers who choose to start their plan outside of open enrollment, they must meet certain employee participation requirements. Some companies require 50% and others require that 70% of the eligible employees must join the plan for the health insurance company to offer the group coverage. The lowest I’ve seen is 25%. 

     How do you find your company’s participation rate?  

Take all your full-time employees (these are the employees who work over 30 hours per week) and subtract any employees who don’t want coverage (because they have another group plan either through a spouse or another job). Then, divide the number of employees enrolling in the plan by the number of total eligible employees. That will give you your percentage of participation.  

If you’re having a hard time achieving the desired participation rate, you also have the option to add employees who work at least 25 hours per week. These may be younger employees, so they may also help bring the premiums down in cost. 

     I guess the short answer to the question about whether or not it matters when you start your group health plan comes down to how many employees you have that would like to join the plan.