2 Person Business Can’t Get Group Health Plan Under ACA

My husband and I own a mom-and-pop business and used to qualify for a small group policy. Out of nowhere, with no explanation, we’re no longer considered “employees” of our company so no more small group policy for us. They just redefined all these 2-person businesses so they could force us to go onto the individual health insurance market to fund all the subsidies. We make a very modest living and don’t qualify for any subsidy. So we’re forced to choose among individual policies that are MORE EXPENSIVE AND FAR WORSE than the small group policies that we used to have access to. What an underhanded move to force us working self-employed folks to pay for all these subsidies that are flying out the door! All we can do at this point is get angry and be ignored while we shell out money we don’t have so everyone else on the exchange can have discounted insurance.

Here’s a link on the topic on my website njhealthinsurancehurts.wordpress.com

NOTE FROM OCF: The above link has been checked by ObamaCareFacts.com. It discusses an individual’s point of view on how labeling a two person business as individuals rather than allowing them group coverage is backfiring for them. The business owner works for the business, so they technically have one employee. Each person in the business must choose individual coverage instead of group coverage. Business with 2 employees, not including the owner, are eligible for group plans under the law.

Please also note that a business with one employee can reimburse individual coverage and get the tax benefits from that. So this is a big plus, despite not being able to offer group plans. See our page on HRAs.

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Same thing is happening to my husband and I. We have owned and operated our C Corp since 1998 and have had continuous group coverage. But because we no longer have any other employees and it is just he and I as 50/50 owners of our C Corp they are refusing to continue our group coverage. The individual plans are cost prohibitive and have terrible coverage. We have no real options. Considering forgoing health care and insurance. They are effectively discriminating against family businesses.


This is exactly what happened to my husband and me. We always had group health insurance and along came Obamacare and the old “if you like your insurance you can keep your insurance” went right out the door. I was told by an ACA “customer service” agent that if I divorced my husband and continued to work with him, we could continue to qualify for a group plan. The issue was that we were married. My accountant and his wife DO qualify for a group plan, but they are a C-Corp, not an S-Corp. We are thinking of restructuring because the health exchange in November 2016 had NO insurers offering access to any “Tier 1” hospitals in our area in a worst case scenario event. We wound up getting a short term plan through United Healthcare (360 days) that the Obama administration made illegal (they are now only 90 days) on their way out the door. Obamacare has been the biggest disaster on earth for us and I hope it gets repealed FAST.


My wife and I have been in business since 2005. Our health insurance premiums for catastrophic insurance have been increasing by roughly 10% every year before and after the ACA. This system has been broken for a long time. We really need to stop blaming Obama for trying to fix it. Nobody else had the courage to try! Obama took the lid of the pot when he stopped the insurance companies from managing risk, AKA dropping people with pre-existing conditions and/or charging ridiculous amounts to cover people who are more expensive to them. If you are for the free market no matter what, then think about how you would feel if you were bankrupt because of the cost of healthcare. A common problem before the ACA. I’m sorry, but pure market driven healthcare is a disaster. This is much different than buying a car. I’d gladly pay $12k/yr more in federal taxes for my wife and I if that meant full coverage with no other costs. i.e, no deductibles or coinsurance. That’s much more than our friends and parents pay for Medicare.

Douglas Kirkpatrick

My wife and I have a C corporation in Maryland; we are the only full time empoyees and use independent contractors.
We were told we could not qualify for a group from BlueCross and had to purchase individual coverage, which we did with a $4000 deductible – premium for both was $800 per month.
On Jan 1, 2017 our new premium was $1800 per month with a $9000 deductible.
I remember Obama saying that under the “Unaffordable Care Act” “premiums would very likely go down”


Premiums did go down after tax credits for those who qualify for assistance, but certainly we can look around and see clearly that there was a rise in premiums over the years. Some of this is the ACA’s protections and benefits being factored in, some of it is just the rising cost of healthcare which has not yet been properly contained.

Kathleen Reardon-Anderson

There is no coverage of this problem in the media. My sons 2-person insurance with Oxford in NYC was cancelled. I never understood the logic until I read that it was a strategy to beef up the individual exchanges. The people who wrote the plan obviously have no concern about the self-employed, who for the most part, have ended up paying full premiums and getting nothing.


The “Obamacare Facts Note” about my original post leaves out a critical point: BEFORE the ACA, we were considered “employees” of our company and allowed to receive group coverage. It was the ACA that redefined us in order to have us pay into the system that others are benefitting from. This isn’t just my point of view, this is fact. I checked with Jonathan Gruber, one of the architects of the ACA, and he said that they decided to require mom-and-pop businesses to buy individual insurance on the exchanges “for the greater good.” It was what I suspected all along, but jarring to hear it from the horse’s mouth. Here’s a link to his full email response to me: https://njhealthinsurancehurts.wordpress.com


Wow, pretty cool. Good amateur journalism. Bravo.

So for those who are nervous about clicking a link. The article says that Gruber says,

“Thanks for writing. I am not the “architect” of the law but I do know it well.

There is no “right” answer for how to treat S-corps. One could make an argument for either keeping them in the small business pool or moving them to individual pool. In the end the decision was that a robust individual pool would serve all involved the best.

Either way, some businesses lost (those with the very healthiest employees) and some gained (those with less healthy employees). Which lost and gained varied a lot by state. I know that is no great comfort if your premiums [are too high]. My only suggestion is to shop around and hopefully find one of the lower premium narrow network options that might work for you.”

So i’ll confirm. It is my thoughts that this part of the ACA is what i’d call “a sticking point”. I’m no fan of placing restrictions on very small businesses. I’ve never known law makers of either party to be overly generous to small businesses and the middle class. Democrats tend toward helping “have nots”, Republicans tend to help “haves”, but a respectable portion of America is putting in hard work are somewhere in the middle and that class isn’t always helped.

This is a great example. Sure tax credits for small businesses, the 1 employee exemption, and sect. 105 plans can help, but I 100% get the frustration (which I think is the subtext of Gruber’s statement here).


I’ve been in healthcare for 35+ years and Obamacare is not about healthcare, quality care or even access—its about REDISTRIBUTING WEALTH and eventually eliminating private insurance and replacing it with a single payor system governed by big government – AKA Socialized Medicine.


I get the sentiment, but I disagree with some take-aways. A single payer fund, but private for-profit and non-profit delivery of care (AKA providers) isn’t exactly socialized Medicine. Democrats wouldn’t even include language about single payer in the platform, so I think the worry should be more that we won’t get single payer than we will get socialized Medicine. A single fund would be great for providers and patients if administered well. Not simple, but I think a good thing.

As for the current system, it sure has sticking points (high deductibles, sometimes high premiums, sometimes annoying taxes) but what of the tens of millions who are covered or ensured reasonable premiums despite preexisting conditions under the law? They aren’t nothing. If we do replace we have to take seriously the lives of these folks. I think we can do more for the middle class and less for the elite with healthcare, but I wouldn’t go as far as the above statement.

Fustrated and Angry in NJ

We are a married couple who own and both work (our butts off) in a small business (consultants). We have to travel out of state on a frequent basis to carry out projects. Under the the current rules we do not qualify for group insurance. Individual plans, equivalent to the one we had, do not cover out of state medical costs, only ’emergency and urgent medical services’. From our research, even getting reimbursed for those ’emergency events’ will require time and probable wasted effort with the insurance companies.

We are now forced to the one company that offers a multi-state individual health plan in NJ. Our premium hike will be approx $600/per month more, in order to match our previous plan!!!

Please explain how this is not hurting small business, adding additional financial ‘marriage penalties’ in addition to the taxation ones and taking away the limited choice we already had????!!


In your situation there isn’t much to say. Small businesses come in all types. A small business is exempt from the mandate, and can get tax credits for offering coverage. In these way the ACA works very well for small businesses. When it comes to a small firm that travels and needs to get coverage for it’s owners, it’s going to be as expensive as insurance is… which isn’t much fun for anyone. Also with new increases and slightly limited choices it can be less than ideal. So generally the ACA helps small businesses, but I can wholly agree this was not the case with your business. It is frustrating.


My husband and I also run a mom-and-pop business in Arizona. Our insurance will double next year, for a total of $25,000 for 2017. OUCH! I feel like we mom-and-pops will be paying for everyone else!


My wife and i are in the same predicament in Ohio.
Could you let me know what insurance company did you find in NJ that covers out of state? We are being forced to move out of Ohio if we want a decent health coverage, as even the most expensive individual plan will provide abysmal coverage.


The same thing happened to me. Group plan canceled and forced into individual plan that is more expensive and far worse in terms of premium, network coverage and deductible. Obamacare is a disaster.

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