The org chart and the family tree overlap.
- Owners who want coverage, with eligibility set by entity type and plan terms
- Spouses, children or siblings on payroll, where real hours and duties outweigh the relationship
- A small census, where one or two waivers can decide whether participation is met
- One relative running payroll, HR and enrollment with no backup
- Owner premiums that can be taxed differently for sole proprietors, partners and S corporation shareholders
- Continuity if a key family member can't work
Two questions get tangled. Whether an owner or relative can join the plan is a carrier question we answer with each quote. How the owner's premium is taxed is a question for your CPA, since we don't give tax advice.
Washington's small-group market covers employers that averaged 1 to 50 employees in the previous calendar year, counting affiliated companies as one employer. Group medical also needs at least one eligible common-law employee, so an owners-only business may not qualify. The Insurance Commissioner's small-business page lays out the options.
Four decisions that put family and staff on the same footing.
Eligibility by role, not relationship
Write the rule around job and hours, and apply it to relatives the same way.
Carriers look at actual employment, not the family tree. Define the eligible class and keep payroll records that back it up.
Illustrative: an eight-person family bakery where the owner's son works full-time, her husband covers the register two mornings a week, and five non-family bakers are full-time. A full-time rule makes the son and the five bakers eligible on identical terms. The husband isn't, unless the rule changes for every part-timer.
A contribution rule that names classes, not people
One employer share for everyone in the same class.
Paying more toward a relative's coverage than the foreman's is a fast way to lose the foreman. Set the company share by class, such as a percentage of employee-only premium for all full-time staff, in writing. If owners will be handled differently, have payroll or your tax adviser confirm it first.
Participation math for a small group
In a five-person group, two waivers are 40% of the census.
Carriers can require up to 75% of eligible employees to enroll, or 100% for groups of three or fewer. Relatives often have coverage through a spouse's job, and Washington doesn't count employees who waive because they have similar coverage elsewhere, so note why each person waives. If a group plan won't fit, a QSEHRA or ICHRA funds an allowance toward individual coverage instead.
Protection for the people the business runs on
Income and continuity coverage often matter more here than extras.
Group life and disability protect household income. Key person coverage and buy-sell funding protect the company if a family member it depends on dies. Your attorney drafts any buy-sell agreement, and we place the coverage behind it.
A calendar that runs through your CPA's office.
Four months out: list who counts
List every owner and relative on payroll with role, typical hours and entity. Your CPA reviews owner tax treatment while we check carrier eligibility.
Three months out: quote on a real census
Send ages, home ZIP codes and coverage tiers through our census page. We price small-group plans and, where the group qualifies, level-funded options side by side.
Two months out: write the rules
Choose the plan, set contributions by class and document eligibility. A QSEHRA or ICHRA needs written notice at least 90 days before the plan year, so for those, finish this step before the three-month mark.
One month out: enroll and train a backup
Employees elect coverage, and two people learn to enter hires and terminations in Employee Navigator. We handle carrier changes.
Every year-end: recheck with your CPA
A child goes full-time, a spouse steps back, ownership shifts. Revisit eligibility and owner treatment before renewal.
Two places family plans go sideways.
Treating payroll status as eligibility
A paycheck isn't the same as plan eligibility. Match each relative's actual hours and duties to the eligibility terms, and keep records that show it.
Keeping it all in one person's head
When the relative who handles benefits is out, deadlines slip. Name a second administrator, write down who sends us changes and when, and share the renewal date with both.
What family owners ask us first.
My spouse and I are the only people on payroll. Can we buy a group plan?
Maybe not. Group medical needs at least one eligible common-law employee, and an owners-only business may not have one. Whether a spouse on payroll counts depends on the entity and the actual job, so ask your CPA. If group coverage isn't available, individual coverage is the fallback.
Do the owners' premiums get the same tax treatment as employees'?
Not necessarily. Sole proprietors, partners and S corporation shareholders can each be treated differently, and plan eligibility doesn't settle how the premium is reported or deducted. The IRS explains the S corporation case. Have your CPA confirm it for your entity.
A relative waived coverage. Does that hurt our participation?
It depends on the reason and the carrier. Tell us who is waiving and what coverage they have instead, and we'll check it against each carrier's participation rules before you apply.
Is level-funded realistic for a small family group?
Sometimes. A level-funded plan is priced on your own group, so underwriting looks closely at the people enrolling, mostly relatives in a family business. Underwriting can raise the price or decline the group, renewals follow your own claims, and a surplus refund is possible, not promised. We quote it beside small-group plans.
Can a non-family office manager run enrollment?
Yes. We train whoever you name as company administrator, and we handle carrier changes. Group clients who want Employee Navigator get it customized at no extra cost, and COBRA runs through a third-party administrator we coordinate, whose fees may apply.
Where these rules come from.
Washington OIC: small business health plan options. IRS: S corporation compensation and medical insurance issues. General information, not legal or tax advice.
Sort out the family questions before a carrier asks them.
Send your entity type, who's on payroll in what role, and who runs payroll today. No obligation, and no current plan needed.