Complex ACA SEP Question

[Broker22]

If a small employer,in this case a doctor carries a group plan for himself and an employee and he decides to drop the coverage. Does this create an sep for the employee? What about for himself? Does it make any difference if he is set up as LLC, sub chapter s, or sole proprietorship. Thank You.

 

[Yagents]

Losing group coverage due to termination of the plan is an SEP, even for the owner.

 

[RayNY]

No restrictions on the type of company. Any true group plan can be cancelled for any reason (even requested termination or non-pay) and it generates an SEP for anyone covered by that plan.

I've had sole props cancel their coverage and use it as a QE to get individual coverage. Carriers ask for a "letter from the employer", so I have the owner write a letter to themselves. I've put quite a few through without issue.

Seems silly, but it's true.