The Affordable Care Act (ACA) requires fully insured Small Group medical plans to offer an annual one-month Special Open Enrollment (SOE) Window. This period, which runs from November 15 to December 15 annually, allows eligible Small Group employers to enroll in medical coverage without needing to meet the usual contribution or participation requirements. Group coverage obtained during the SOE Window becomes effective January 1, providing a much-needed opportunity for employers who struggle to meet these thresholds.
For Small Group health insurance carriers, SOE brings tight submission deadlines that must be strictly followed. While contribution and participation requirements may be waived during SOE, all other underwriting requirements remain in place. Refer to our W&B exclusive California SOE Underwriting reference and Nevada SOE Underwriting reference for comprehensive carrier guidelines and information applicable during this year’s SOE.
Guaranteed Issue for Individuals and Small Groups
The ACA includes a guaranteed issue provision, requiring that all health insurers in the Individual and Small Group markets accept any small employer or individual applicant who applies for coverage, provided they live or work within the plan’s service area. However, this guaranteed issuance is limited to certain open enrollment and special enrollment periods in some circumstances.
Participation and Contribution Requirements
In many states, like California and Nevada, carriers may decline to issue group health coverage if fewer than 50-70% of employees elect to enroll. Additionally, insurance carriers’ contribution rules often require that employers contribute a specified percentage toward premiums. For various financial or logistical reasons, some businesses struggle to meet these participation and contribution requirements, even when they offer moderate or more generous contributions.
How SOE Eases These Challenges
The Special Open Enrollment Window provides a critical solution for employers facing participation and contribution hurdles. Even with reasonable contributions, many employers still encounter difficulties as younger or lower-income employees may opt out of coverage. Since the federal ACA Individual Mandate penalty was reduced to $0 in 2019, the incentive for many to obtain coverage has diminished. However, California introduced its own state individual mandate in 2020, which encourages Californians to enroll themselves and eligible family members. Nevada and most other states, however, do not have similar state individual mandates, leaving many residents without a comparable enrollment incentive.
Applicable Large Employers (ALEs) and ACA Compliance
It’s important to note for Applicable Large Employers (ALEs) that the ACA’s Employer Shared Responsibility mandate still applies, even if they enroll in coverage through SOE without meeting the usual participation and contribution thresholds. The ACA employer mandate requires ALEs to offer affordable coverage (meeting minimum value) to Full-Time employees and their dependents. For 2025, affordability means the employee’s monthly contribution for the lowest-cost plan (at the Employee-Only rate) should not exceed 9.02% of their monthly income as calculated by the Rate of Pay, W-2 Box 1 income, or Federal Poverty Level safe harbors.
Carrier References
Word & Brown offers state-specific resources on carrier underwriting rules, requirements, and procedural details for the 2024 SOE period. Download our California SOE reference and Nevada SOE reference for comprehensive carrier guidelines and information.