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Effective as of July 2018, new Virginia legislation allows self-employed people without employees to purchase a small group health insurance plan as an alternative to an individual market plan.
As a result, if you are a sole proprietor, other self-employed person, or their immediate family member (W2 verification needed), you may now qualify for a small employer health insurance plan.
With unrestricted access to the small group market, it’s easy to see how those who are self-employed might choose to skip coverage in the individual market, and instead enroll in a small group plan mid-year. Small group plans are available year-round, as long as the employer meets the insurer’s minimum participation requirements. For employers who don’t meet the minimum participation requirements, coverage is available for purchase between November 15 and December 15 each year, but a self-employed person without any employees would have 100 percent participation, since he or she would be the only eligible employee.
In the individual market, however, coverage is only available during open enrollment from November 1 to December 15 or during limited special enrollment periods (many of which require that the person already had coverage before the qualifying event that triggered the special enrollment period).
As defined in the text of the legislation: “Small employer” means (in connection with a group health plan or health insurance coverage with respect to a calendar year and a plan year) an employer who employed an average of at least one but not more than 50 employees on business days during the preceding calendar year and who employs at least one employee on the first day of the plan year.
In determining whether a corporation or limited liability company employed an average of at least one individual during the preceding calendar year and employed at least one employee on the first day of the plan year, an individual who performed any service for remuneration under a contract of hire, written or oral, express or implied, for a (i) corporation of which the individual is its sole shareholder or an immediate family member of such sole shareholder or (ii) a limited liability company of which the individual is its sole member or an immediate family member of such sole member, shall be deemed to be an employee of the corporation or the limited liability company, respectively.
In fact, for one Fahmy & Associates’ client who was paying over $4,000 per month for an individual CareFirst plan — as he did not qualify for a marketplace subsidy and could not qualify for group coverage since he did not have any employees — we were able to write him a group plan with more favorable benefits for almost half the cost of what he was paying for the individual plan!
If you are interested in learning more about One Person Group Medical Coverage and seeing how much you could potentially save by purchasing a small group plan instead of an individual market plan, please contact Fahmy & Associates today at 703-760-4630