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N.J. Small Group Eligibility

Frequently Asked Questions: N.J. Small Group Eligibility

What are the employee eligibility requirements for a N.J. Small Group?
Who qualifies as an eligible dependent?
What if a child is not a full-time student for a short period of time?
Can coverage be provided to an independent contractor (1099 employee)?
What is the minimum participation? What is a legitimate waiver?
Can eligibility criteria be varied by class of employee?
Can one person enroll?
Are union employees eligible?

1. What are the employee eligibility requirements for a N.J. Small Group?
To qualify for small group insurance, an employee must be working full time, which is defined as 25+ hour per work. Temporary and seasonal employees, as determined by the employer, do not qualify. If an independent contractor works 25+ hours exclusively for the employer, they may be made eligible.

2. Who qualifies as an eligible dependent?
To be considered an eligible dependent, a covered person must:

Be legally married to the employee;
Be a child of the employee, up to their 19th birthday;
Be a child of the employee, up to their 23rd birthday, who is enrolled full time at an accredited school;
Be an unmarried, disabled child of the employee who depends on him/her for financial support;
Be a domestic partner of the employee, if the employer offers coverage. A domestic partner is defined as a same-sex partner over the age of 18; OR
Be an eligible Adult Child who is a N.J. resident or enrolled full time in school.

3. What if a child is not a full-time student for a short period?
If a child is not enrolled full time, they may elect COBRA or N.J. Continuation insurance, select Adult Child coverage, or purchase coverage as an individual. If a student’s time off or illness results in the school no longer classifying them as full time, the student will not be eligible for dependent coverage.

4. Can coverage be provided to an independent contractor (1099 employee)?
As a small employer, you may elect to cover all or no independent contractors. An individual is eligible for insurance coverage as an independent contractor if:

They have a written contract to perform a service for monetary or legal consideration;
They work exclusively for the employer;
They work 25+ hours per week;
They are not employed on a temporary or substitute basis;
The relationship has not been established between the contractor and employer for the purpose of obtaining insurance coverage.

5. What is the minimum participation? What is a legitimate waiver?
Minimum participation is set at 75%. Valid waivers include:

Employees covered by an employer plan
Employees covered by Medicare (P.L. 2001, c. 346 as of 1/6/02)
Employees covered by N.J. Family Care and Medicaid (P.L. 2005, c.166 as of 10/4/05)

No other refusal will qualify as an eligible waiver.

6. Can eligibility criteria be varied by class of employee?
Employers may, at their discretion, implement varying probation periods, premium contributions, and/or pay plans based on “classes” of employees, where class is defined by title, location, length of service, etc.

7. Can one person enroll?
As long as 75% participation is reached in aggregate, one employee may enroll. This includes permitted waivers, as described above.

8. Are union employees eligible?
If union employees have collectively bargained for health coverage, they will not qualify. Note that these employees do not count in the 2-50-size group, but count in regard to COBRA and TEFRA.