To issue a group health plan, carriers usually require the employer to pay a minimum share of the premium, often around 50% of the employee-only cost, and to enroll a minimum percentage of eligible employees, commonly about 70%. These rules protect the insurer against adverse selection.
Participation
Most small group health plans have minimum participation requirements set by insurers. The required participation percentage will vary by state and by carrier and is usually calculated after removing eligible employees with valid waivers (those declining because they have other coverage). Carriers can have different criteria for what determines a valid waivers. Note that participation requiremetns are waived for small employers that enroll during the annual small group enrollment period (usually Nov. 15 – Dec. 15 for a Jan. 1 effective date).