The Small Business Guide to Open Enrollment 2022
As a small business owner, you're probably aware that “Open Enrollment” is upon us once again. Open Enrollment is the period of time at the end of the year when individuals choose their health insurance plan for the upcoming year. This period is notable for other types of plans however, because this is when new pricing is released for employer-sponsored health plans for the upcoming year.
Open Enrollment runs from November 1 to December 15, with some states starting as early as October 15, and some states extending the period through January 31. During this time, you can visit the federal health exchange and find an individual plan. No matter which plan you select, coverage for plans selected during this time begin January 1, 2022 and end December 31, 2022.
In this post, we'll do our best to explain some of the basics around Open Enrollment, and how it applies to small businesses looking at health insurance options for 2023.
Open Enrollment Period
Something most people don’t realize: Open Enrollment really only applies to you if you’re enrolling in an individual plan. Individual plans are only available for new enrollees between November 1 and December 15 (or as your state allows). If an individual needs to sign up for an individual plan outside of this window, however, they must have a qualifying life event. Qualifying life events include marriage or the birth of a child, among others.
At SimplyInsured, we view Open Enrollment as a great reminder of the need for health insurance for everyone. While you can sign up for small business health insurance through a broker like SimplyInsured at any time during the year, Open Enrollment often brings up a lot of activity and discussion around health insurance. We welcome this time of year!
Cost
In general, we’ve found that small business plans are 10-20% cheaper than individual plans, but this varies based on income. If your individual income is at a certain threshold, you may qualify for subsidies from the government when purchasing individual insurance. The lower your annual income, the higher the subsidy. We recommend this calculator to help you determine your subsidy.
An additional piece of information to help with the decision-marking process: small business health insurance plans are tax deductible, which reduces the cost of coverage by the business tax rate.
Carrier Availability
We like to offer a quick peek behind the curtain of insurance: individual plans are less profitable than employer-sponsored plans. Because of this, many insurers have been leaving the individual health exchanges, limiting the carrier options on the individual market. Some carriers are opting to stay on the exchanges, but only offer more restrictive plans, such as HMOs, to control their costs. In contrast, nearly all carriers offer small business health insurance options and provide multiple different types of plans.
Coverage
No matter which option you go with, you should be able to find a plan with the best coverage level for your needs. On the individual health exchanges, you may see fewer carriers, as noted above. Generally, different tiered plans are available (i.e., bronze, silver, gold, and platinum plans) for both individual and small business plans.
Doctor and Hospital Network
Though this varies across markets and plan levels, small business health insurance plans generally have larger doctor and hospital networks available. This is primarily due to the wider range of options available.
Eligibility
Individual plans have less stringent eligibility requirements than group plans. To qualify for an individual plan, you must live in the U.S., be a U.S. citizen or eligible immigrant, and cannot be incarcerated. To qualify for a group plan, there must be at least two people in your company. At least one of the employees must be a W-2 employee. Additionally, the group cannot consist of a married couple unless you live in Washington, California, or Texas.
Have more questions? Feel free to send us an email from our Contact page!