CALIFORNIA
GROUP HEALTH INSURANCE PLANS AND
1099 EMPLOYEES
1099 Contract Employees
Your 1099 contract employees will be coming to you with questions and options on Employer sponsored health benefits and where they may fit in. Contract workers are a core spoke in the California economy nowadays and offer a chance for an Employer to evaluate an Employee, and an Employee to evaluate an Employer without any long-term legal or financial commitment. Essentially 1099 employees are considered to be self employed individuals for both tax purposes and have no legal or official employer/employee status other than expressed temporary labor.
When do your 1099 contract workers qualify for coverage? A 1099 contracted employee can qualify as an eligible employee under certain conditions. Some of the California insurance carriers, not all mind you, will allow you as the Employer to make a company policy to offer group insurance coverage to 1099 employees who have been with you employment long enough to show up on your federal tax return. Usually you will have to qualify as a company on the standard qualifications under AB 1672, which requires 70% participation of full time w2 payroll employees. Once this is met 1099’s can be considered if the carrier allows.
The key in determining whether or not your temporary employee is eligible is whether or not the employee is reflecting 30 hours weekly on w2 payroll, which will result in appropriate numbers on the State of California DE-6 Quarterly Wage and Witholding form. You can choose to offer coverage to your permanent part time employees typically down to 20 hours weekly minimum.
