UnitedHealthcare clarifies ERISA group health plan qualification

In order to qualify as a “group health plan” under the Employee Retirement Income Security Act of 1974 (ERISA), an employer must have at least 1 eligible non-spouse “common law employee” enrolled in addition to an owner. Entities that do not meet this requirement will not be renewed upon audit or renewal. 

How it works based on legal business structure

  • Partnerships: If only partners and their spouses are covered, they are not a group health plan unless there is at least 1 other common law employee eligible and enrolled in coverage.
  • Corporations: Two owners, who are not spouses, qualify as a group health plan, if at least 1 of the owners can document that they are actively working and enroll in the health plan.
  • Individual Owner/Proprietor: An individual owner or the individual owner and his or her spouse do not qualify as a group health plan unless at least 1 other common law employee is enrolled in the plan. It does not matter if the business’ legal tax structure is an LLC or other Corporation.

    Children of the sole owner may be the other common law employee, so long as:
    • He or she is over the age of 18 (i.e. no longer a minor child per state law).
    • He or she is enrolled for coverage under the terms of the employer-sponsored plan. 

Contact your UnitedHealthcare representative if you have questions.