What Are the Rules for Small Business Health Insurance in New Jersey?
If you own a business based in New Jersey and employ between two and 50 workers, your company meets the Department of Banking and Insurance's definition of a small group. Should you choose to implement a group health insurance plan as part of your benefits package, it is essential that you understand the basic rules regarding this state's eligibility and management criteria for medical insurance policies.
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Eligible Employees
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According to DOBI, "an eligible employee is a bona fide employee who works for an employer 25 or more hours per week every week." To qualify as a small employer in New Jersey for the purpose of obtaining group health insurance, at least two but fewer than 50 of your employees must work at least 25 hours each week.
Participation Requirements
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To offer a group health insurance plan to your workers, at least 75 percent of all eligible employees must choose to participate in your plan or must qualify as an "eligible waiver." If more than 25 percent of your company's eligible employees choose not to enroll in the new group health plan and do not currently have coverage elsewhere, your entire group is disqualified and cannot purchase a plan.
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Employer Contributions
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New Jersey law requires small businesses to contribute a minimum of 10 percent of the cost of "single" coverage for each participating employee. Even though employees electing to cover spouses and dependents will generate higher monthly premiums, employers are only obligated to contribute a small portion of the single person's cost.
Guaranteed Issue
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In this state, insurance companies cannot deny or reject a small group or anyone in it, provided they meet DOBI's established criteria for small group coverage. Regardless of each employee's health status and claims history, a policy must be issued to every eligible worker choosing to enroll in the plan.
Guaranteed Renewal
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Like the state's rules regarding guaranteed issue of policies for small businesses, insurance carriers cannot terminate or cancel a small group's health insurance plan because of employees' usage of benefits or current health conditions.
Pre-Existing Conditions
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For companies purchasing group health insurance for the first time, any employee who has been without coverage for at least one month prior to the effective date of the new group plan may be subject to pre-existing condition limitations. More specifically, DOBI states that the carrier may deny benefits for any condition that "was actually diagnosed or treated, or treatment was recommended or prescribed medications were taken for the condition."
Waiting Period
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Employers in New Jersey may institute waiting periods for new employees during which they are ineligible for the group health insurance coverage. Durations of 90 days are most common, but business owners retain the right to extend eligibility waiting periods to a maximum of six months.
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