As a small business, you’re likely familiar with the challenges of meeting health insurance contribution and participation requirements. Fortunately, there’s a crucial solution available annually—the Special Open Enrollment (SOE) Window. This period, mandated by the Affordable Care Act (ACA), allows Small Group employers to offer medical coverage to employees without needing to meet the usual contribution or participation thresholds. It’s an opportunity that can ease the burden for businesses that may otherwise struggle to meet these requirements.

What Is the SOE Window?

Each year, from November 15 to December 15, the ACA opens a one-month Special Open Enrollment (SOE) Window for Small Group medical plans. During this time, employers can provide group medical insurance to their employees without adhering to the standard contribution or participation minimums. Any group coverage secured during this window will become effective on January 1, giving employees the start of the new year with medical coverage in place.

Guaranteed Issue and Waived Requirements

Under the ACA’s guaranteed issue provision, health insurers must accept any eligible small employer or individual who applies for coverage, provided they are within the plan’s service area. However, meeting coverage requirements outside the SOE period can be challenging for many small employers. In states like California, for instance, health carriers typically require a minimum of 50-70% of employees to enroll. On top of this, they often stipulate that employers contribute a set percentage toward the premiums.
The SOE Window helps small businesses circumvent these restrictions, enabling them to provide essential health benefits without the usual participation or contribution conditions. This flexibility is especially beneficial to businesses whose employees may opt out of coverage due to financial reasons or other preferences.

Why Is SOE Important for Small Businesses?

Many small businesses, despite offering reasonable or even generous contributions, encounter obstacles due to the federal ACA Individual Mandate penalty being reduced to $0 in 2019, which lessened the incentive for employees to secure health coverage. While California introduced its own individual mandate in 2020 to encourage residents to obtain insurance, financial constraints or lack of interest may still impact participation rates. The SOE Window gives these employers an additional option to enroll their workforce, reducing the likelihood of coverage being denied due to unmet requirements.

Important Deadlines and Guidelines

While the SOE period allows for waived participation and contribution requirements, it’s crucial to keep in mind that all other underwriting guidelines still apply. Deadlines are tight, so it’s essential to work closely with your benefits provider to meet all submission requirements within the SOE Window.
Our team at CorpStrat is here to guide you through this special enrollment period and provide you with resources tailored to help your small business benefit fully from this opportunity. If you’re interested in learning more about how SOE can work for you, or if you have any questions, please don’t hesitate to reach out!

With healthcare costs climbing, small business owners are navigating difficult choices between competitive wages and sustainable benefits plans.

In today’s challenging business environment, healthcare costs are becoming an increasingly difficult hurdle for small business owners. A recent study, the *2024 “Pulse of the Purchaser” survey* by the National Alliance of Healthcare Purchaser Coalitions, highlights how the rising costs of healthcare are affecting employers’ ability to offer wage increases, and this impact is especially significant for small businesses. As you work to build competitive employee benefits plans, it’s crucial to weigh the tough decisions you may face regarding costs, salaries, and overall business sustainability.

The study revealed that a staggering 74% of employers feel healthcare costs directly force trade-offs with wage or salary increases. For small businesses already working with limited budgets, this can lead to difficult choices: how to keep benefits attractive without compromising on wages that retain skilled employees.

Here’s a closer look at what’s driving healthcare costs:

Prescription Drug Prices: According to the survey, 99% of employers view rising drug costs as a significant threat to affordability. For small businesses, adjusting formularies to include more affordable, generic options or leveraging biosimilars can help offset these costs. Additionally, transparent pharmacy benefit managers (PBMs) may provide small businesses with more control over costs by offering clear contracting and pricing.

High-Cost Claims and Hospital Expenses: High-cost claims are another significant concern, with 84% of employers noting their impact. Options like enhanced screening programs and promoting early detection can help reduce high-cost claims in the long term. For small businesses, partnering with healthcare provider networks that emphasize preventive care or offering managed disease programs through their insurer can help mitigate risks associated with high-cost claims.

With 72% of the survey’s employers indirectly tied to the “big three” PBMs—CVS Caremark, Express Scripts, or Optum Rx—through their fully self insured plans, its hard for them directly to impact the delivery of prescriptions. This year we are seeing a significant disruption in the ways that insurance plans are distributing drugs, with the Amazon Blue Shield collaboration as a prime example of the changes in RX delivery.

Unfortunately, there are few tools that small employers can use to directly impact the actual claims. Large carrier network reimbursements are key to driving down costs and ultimately premiums.

For small businesses in Los Angeles, the balance between providing competitive compensation and sustainable healthcare benefits can be critical for long-term success. According to the survey, rising costs in healthcare have made benefits not just a financial issue but a “survival” issue for businesses. Exploring flexible benefits options and building sustainable health and wellness programs are two impactful strategies for supporting your team without overextending your budget.

In navigating these challenges, working closely with a your CorpStrat benefits advisor can also make a significant difference. By helping you identify practical solutions to control healthcare costs, they can be a valuable partner in balancing cost control with your business’s retention and recruitment goals.

With the right strategies, small businesses can continue to thrive by providing meaningful benefits that support their employees’ well-being, while managing costs effectively.