How do I know if my business is a small or large group?

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This explains how to know if your business is considered a small or large group, which affects the health insurance you buy.

Group size has long been a factor in designing health insurance plans for businesses. The Affordable Care Act is making group size even more important. Whether your business is a small or large group affects your choice of health insurance plans for employees.

Here's what you need to know about figuring out your group size, and what it means if you offer health insurance to your employees.

Small versus large

In 2016, the definition of a small group is different based on whether or not you buy your coverage through the SHOP.

Your group is considered a small group if:

  • You buy your coverage directly from us, outside of the SHOP, and you have 50 or fewer eligible employees.
  • You buy your coverage on the SHOP and you have 50 or fewer full-time equivalent employees.

That means the health insurance plan you choose for your employees must meet the same standards as plans for individuals and families. This is required by the Affordable Care Act. All of our small group plans meet these requirements.

We consider your business a large group if you have 51 or more eligible employees. The Affordable Care Act has different requirements for large groups, and they can choose from a wider selection of plans. Contact us to learn more.

Tip: Beginning with plans that start on or after Jan. 1, 2016, you can use your rate sheet from us to check your group size. Under Rating Type, it'll tell you whether your business is a small or large group.

What are full-time equivalent employees?

An employee who works an average of at least 30 hours a week is considered full-time. So if you have 53 employees working 40 hours every week, you have 53 full-time equivalent employees. That means your business is a large group.

It gets a little more complicated if you have part-time or seasonal employees. You can count them so that they add up to full-time equivalents. Here's a simplified formula:

  1. Add the total hours worked in a month by all part-time employees.
  2. Divide by 120.
  3. The result is the number of full-time equivalent employees.

Knowing how many full-time equivalent employees you have is important. You should get legal advice if you need help figuring this out.

Need Help?

Visit our Contact Us section for employers.