Who Qualifies for small group coverage?

The small group marketplace is defined as businesses with 1-50 employees, however, the Affordable Care Act overrides Washington State law and requires that you must have at least one common law (W-2) employee enrolled on your health plan to qualify for coverage.

However, if you file your income tax return as a corporation and you (as the owner) are the common law employee (being paid as a W-2 income employee) you can likely enroll without a second employee.

If you don’t file as a corporation, husband/wife groups and owner-only groups are not eligible unless there is at least one W-2 employee enrolling who is not a spouse and does not have any ownership in the company.

Here are some other examples or who may or may not qualify:




  • Self-Employed person, organized as LLC or S-Corp, pays self via W-2, files corporate tax return. Would likely qualify


  • Self-Employed person employs at least one non-owner, non-spouse W-2 employee (adult child okay). Would likely qualify.


  • Self-Employed person employs spouse as W-2 employee. Would not qualify, however, there is one carrier that will consider issuing a group plan to a husband and wife if both are employed, even if not W-2 employees.  Contact us to learn more.


Further Notes:


  • Above examples are qualified with “likely” because carriers vary in their standards, documentation requirements, ACA interpretations and they often change their underwriting requirements from year to year.


  • If you offer a group plan, all full-time employees are required to be enrolled unless they have Medicare or other group coverage (not individual). You can set full-time eligibility between 20-40 hours per week.


  • Classes of eligibility and “carve-outs” are not allowed.


  • For groups of 1-4, employers are typically required to pay 100% of employee premium (0% for dependents).  


  • Plans have annual renewal, that is, rates are set for 12 months from effective date.  Plans can be cancelled at any time without penalty.