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S.E.H. changes coming to the Small Group Market effective January 1, 2017


SMALL EMPLOYER - The definition of a small employer still remains as at least 1 but not more than 50 employees on business days during the preceding calendar year and employs at least 1 employee on the first day of the plan year. These are the key components to determining a small employer.

A Small Employer would include any employer that employs more than 50 full-time employees IF that employer’s workforce exceeds 50 full-time employees for no more than 120 days as a result of the hiring of seasonal workers.

EMPLOYEE – Using the common law definition under 26 CFR 31.3401(c)-1. The employee must be paid and that pay must be at least minimum wage. There are some that are NOT considered employees. They include: individuals and legal spouses, partners in a partnership, two percent shareholders in a Subchapter S corporation, sole proprietors and independent contractors.

Please Note – Union people covered under a collective bargaining agreement ARE employees and must be counted.

ENROLLMENT ELIGIBILITY – While 30 hours per week is used to define “full-time” for the purposes of determining if an employer is a small employer, 25 hours is used for eligibility and participation requirements.

EMPLOYER OPEN ENROLLMENT PERIOD - The “Employer Open Enrollment Period” is the period from November 15 through December 15 each year. During this period, employers that meet the definition of small employer but do not meet the 75% Participation Requirement or the 10% Contribution Requirement will be accepted for a small employer plan. The effective date of the small employer plan will be January 1 of the year immediately following the Employer Open Enrollment Period. This open enrollment period is NOT an opportunity for an employee to come on to the plan, merely an opportunity for a new small group to enroll.

HUSBAND/WIFE – In a situation where you have a self-employed husband and wife with at least one full-time employee (must work at least 25 or more hours per week) that business would qualify as a small employer. In addition that employer can buy small employer coverage assuming the employer satisfies the participation and contribution requirements. In that case, the husband, the wife and the employee can be covered.

Please note: In order to have a “group plan” there must be at least one employee covered under the plan. This means if the employee waives or refuses coverage the business cannot buy a small employer plan.

NJ CERTIFICATION FORMS – It is imperative that small employer groups return their NJ certification forms to the carrier as soon as possible after receipt. Without receipt of the certification form, a carrier cannot validate the status of your employer group. Just because a carrier may not request the certification form every year does not diminish the responsibility of the employer to furnish one to the carrier.

For additional information, questions or concerns, please feel free to contact David Mordo at or

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