Small Group Plans for Self-Employed Individuals

Great News! We have received the clarification and guidance needed with regard to self-employed individuals.

Therefore, effective immediately Optima Health will resume quoting Small Group plans for self-employed individuals, beginning with a July 1, 2018 effective date.

As a reminder, the bill as signed into law makes the following key changes to the Virginia Small Employer definition:

  1. The definition of small employer now includes self-employed individuals. A self-employed individual means an individual who derives a substantial portion of his income from a trade or business:
    • operated by the individual as a sole proprietor;
    • through which the individual has attempted to earn taxable income; and
    • for which the individual has filed the appropriate Internal Revenue Service Form 1040, Schedule C or F, for the previous taxable year.
  2. The definition of Small Employer was also updated to include how to determine whether a corporation or limited liability company (LLC) employed an average of at least one individual during the preceding calendar year, and employed at least one employee on the first day of the plan year. It states that an individual is considered an employee of the corporation or the LLC if the individual performed and received compensation or payment for any service under a contract of hire, written or oral, express or implied, for:
    • a corporation of which the individual is its sole shareholder or an immediate family member of such sole shareholder, or
    • a limited liability company of which the individual is its sole member or an immediate family member of such sole member.

In addition to our standard enrollment documentation (e.g. member application, enrollment spreadsheet), the following documents are required for self-employed individuals to purchase Small Group plans:

  • Sole Proprietor: IRS Form 1040, Schedule C, E, or F from the previous taxable year
  • Partnership, S Corporation, or LLC: most recently filed Schedule K-1
  • C Corporation: most recently filed VEC or W-2

Please always refer to the Optima Health Commercial Broker Guide for detailed information on this and other helpful information.

If you have any questions, please contact your Optima Health representative.