If you’re an employer offering small business health insurance, or you’re an employee enrolling in it, you may be wondering how dependents work with small business health insurance plans. While the ACA mandates that employers with 50 or more full-time equivalent workers provide their staff with group health insurance, small company owners are not obligated to do so. In short, plans generally allow qualified dependents to be added to any plan. When it comes to group plans though, it’s the employer’s choice whether or not to pay for the dependents’ health insurance.

Details on dependents joining small business health insurance plans

What do insurance options look like for an employee’s eligible spouse and children? This question may not be top of mind for employers but it can be vital for employees. This is important to employees and can positively contribute to employee morale. 

Business managers and owners that seek to engage in employee retention and preserve morale while complying with federal regulations will want to be aware of the relevant details.

Determining your employees’ dependents is essential in comprehending how small business health insurance functions for dependents.

Employees may generally claim anyone as a dependent for health insurance purposes.

By law, however, the following category of people can be identified as a small business employee’s dependent:

• Your employees’ children, including stepchildren, foster children, and adoptees, provided they are under the age of 26
• Any siblings or descendants of your employees’ children, even if they are not the children of the employee themselves
• Adult relatives who make less than $3,000 in gross income and who are not claimed by anyone else as dependents
• Other adults who have lived in their home for at least a year and who meet all the criteria for adult relatives

If your business has more than 50 full-time employees or equivalents, you’re required to provide health insurance to your small business employees. But as a small business owner, you are permitted to make the choice to offer coverage to your employees. The same goes for dependents–if you decide to offer coverage to your employees, you still have the option to choose whether or not you contribute to the cost of health insurance for dependents.

Dependent Insurance eligibility of Spouses and Children

The law notes that respective businesses must provide an employee’s spouse and children with coverage as long as the small business owner offers coverage for any employee’s dependents. This is covered by the group insurance policies mandated by the Patient Protection and Affordable Care Act to cover adult dependents up to age 26.

It is worthy of note that age restrictions vary in each insurance plan. A small business owner may seek to cover children over 26 years of age if they meet certain criteria. For instance, disabled dependent children could continue to obtain coverage if it is evident that they require further support.

For a clear description of eligible dependents for insurance, refer to the evidence of coverage (EOC) text received from insurers. The EOC can also be obtained from an insurance agent or broker. If you have questions or concerns, feel free to reach out to eHealth for more information.

Covering Dependents on Small Group Health Plans

If you offer small business health insurance and want to cover dependents, you may want to look into the Small Business Health Options Program, or SHOP. Created under the Patient Protection and Affordable Care Act, this program offers marketplaces where you can shop for affordable health insurance that meets all your company’s needs, including the need to cover dependents. If you get a plan through SHOP, not only can you get basic coverage for dependents, but you can offer supplemental forms of coverage that dependents can opt into.

To illustrate how this works, say that you buy two forms of small business health insurance for your employees: a standard insurance policy and a policy that specifically covers dental care. Your employees’ dependents have the ability to opt into just the standard plan, just the dental plan, or both of them at once. The same goes if you choose to offer different levels of care for different contributions; dependents can decide whether they want a Bronze plan, a Silver plan, or any other type of plan you offer. This way, dependents can get the exact level of care they need depending on their budget, the state of their health, and other relevant factors.

Employees’ can pay for their dependents’ premiums

It’s worth mentioning again: when you provide dependent coverage through your small business health insurance, you are not required to pay the premiums for that coverage. Most health insurance plans do allow qualified dependents to be added, so in most cases, whether you contribute to dependents’ premiums or not, your employees will be able to add their dependents to the plan.

For more information on dependent coverage and other aspects of small business health insurance, visit eHealth today. This article is for general information and may not be updated after publication.