What is a bona fide employer – employee relationship?
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Reference - Please check with us on latest AB 1083 Requirements
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What is that? Why?
I’ll grant, that I have trouble completely following the logic given to me by Covered CA, but I have to acknowlege that every Insurance Company agrees.
Employer has the meaning given to the term in section 2791 of the PHS Act, except that such term includes employers with one or more employees. All persons treated as a single employer under subsection (b), (c), (m), or (o) of section 414 of the Code are treated as one employer. CFR § 155.20.
Under Section 2791, “employer” is defined by reference to ERISA Section 3(5). [29 US Code §1002 Definitions]
ERISA Section 3(5) requires that an employer employ at least one common law employee (i.e. someone other than the owner).
Worker Classification 20 Factors
Under 29 C.F.R. 2510.3-3(c), a regulation adopted under ERISA, an employee does not include a sole proprietor or the sole proprietor’s spouse, or a partner in a partnership or the partner’s spouse. See also 77 Fed. Reg. 18399 (Mar. 27, 2012). (legal reasoning courtesy of Covered CA Facebook inquiry) SHOP Agent Guidelines
How many common law employees must be enrolled for coverage to be considered group coverage?
A. For a group health plan to be considered a “group health plan” under the Employee Retirement Income Security Act (ERISA), there must be at least one common law employee enrolled. Pursuant to 29 C.F.R. 2510.2-3(b), an “employee benefit plan” does not exist if no “employees” are covered by the plan. Pursuant to 29 C.F.R. 2510.3-1 and 29 C.F.R. 2590.732(d) an “employee” does not include the sole owner of a business or a spouse of the business owner. New York.gov
C Corp separate legal entity owned by shareholders
S Corp – Does not pay Federal Income Tax
Blue Shield Flyer Small businesses and the ACA Rev 3.2013 Michael Lujan was very explicit in 2 presentations to CAHU and LAAHU, an EE is someone who is listed on a DE9C. Sole Proprietors and partners are normally not on a DE9C. The sole prop and partner can be included in a group plan IF they have at least one W2 EE listed on the DE9C.
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(b) Generally the relationship of employer and employee exists when the person for whom services are performed has the right to control and direct the individual who performs the services, not only as to the result to be accomplished by the work but also as to the details and means by which that result is accomplished. That is, an employee is subject to the will and control of the employer not only as to what shall be done but how it shall be done. In this connection, it is not necessary that the employer actually direct or control the manner in which the services are performed; it is sufficient if he has the right to do so. The right to discharge is also an important factor indicating that the person possessing that right is an employer. Other factors characteristic of an employer, but not necessarily present in every case, are the furnishing of tools and the furnishing of a place to work to the individual who performs the services. In general, if an individual is subject to the control or direction of another merely as to the result to be accomplished by the work and not as to the means and methods for accomplishing the result, he is not an employee.
See our webpage on Employee vs 1099 Contractor
Video on how much coverage for death protection you need
Related pages in EmployER Definition – Health Care Reform Section
- 1099 vs Employee & Other Defintions
- One Employee Makes a Group – Historical
- Three employees – Husband & Wife? Daughter?
- Bonifide Employer-Employee Relationship – non spousal
- Dependent Definition – Up to Age 26
- ACA Rates 2018 Final Rule Dependent Child
- Add Newborn
- Children under 19
- Disabled Children – over 26
- Financial Support mandated of adult disabled child – SSI – SSDI
- Rules from Insurance Companies on coverage for disabled children
- Text of Law – Mandating coverage for disabled children §10277
- Registered Domestic Partners – Spousal Health Coverage?