Size Matters: Health Insurance and the Size of Your Small Business

Size matters! It matters especially if you are a business offering health insurance as a benefit to your employees. You all know the 50 FTE number from the Affordable Care Act, but there are other numbers that are just as important…if not more.

Let’s go in order: 20, 20, 50 ATNE, 150

20 Employees: Twenty is an important number in many ways.  The most well-known is the difference between State Continuation and COBRA Continuation. Under 20 employees continuation is governed by state law (in Illinois usually 12 months). Over 20 is governed by COBRA, which is Federal law (usually 18 months).

20 Employees:  Medicare and your small group plan coordinate for folks who are 65 years old or older. If you are under 20, then Medicare is primary. But, if you have more than 20, your plan is primary (except in cases of disability.) Due to the ACA, you should not expect to see “Medicare primary” rates (they are no longer available) but your need to provide a Medicare as Second Payer form is a critical part of having a successful plan. THIS IS CURRENTLY A HOT TOPIC AS INSURANCE COMPANIES HAVE CHANGED HOW THEY COLLECT THIS FORM. SMALL GROUPS ARE EXPERIENCING FINANCIAL CONSEQUENCES FOR NOT BEING COMPLIANT.

50 ATNE: Average Total Number of Employees is how the insurance companies determine what products (more important, what methodology) will be used to sell you insurance in Illinois.  ATNE includes all of your employees regardless of the number of hours. It is determined by the information included in your “quarterly wage and tax” forms filed with the Illinois state government - FORM UI-3/40. This form states the number of employees on payroll each month. The months for the previous year are averaged to determine ATNE.
Why is this important? If you're under 50 ATNE and you buy from the FULLY ACA COMPLIANT WORLD which includes guaranteed issue, community age-rated premiums and renewals, no medical underwriting, no applications necessary (in some cases).  If you have more than 50 ATNE, then full medical underwriting may be required before you can have premium rates.  Additionally, upon renewal your rates will be adjusted based on the experience of the group.

150 Employees: Unless your group insures this many people or is “partially” self-insured, you will not be able to get experience data from your insurance company. Only basic information regarding prescription drug usage and large claims will be made available at renewal. Only when you are larger than 150 is the insurance company in the practice of sharing information.

If the importance of any of these numbers, or the discussion above is a surprise to you, please visit us at

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