Group Eligibility for Small Employers
Each state has different definitions for what constitutes a “small employer.” These state law distinctions are important for state law insurance functions, like classification for rates and eligibility. For specific definitions for each state, please see this page.
If a company fails to satisfy the definition of a "small employer" at any time during the year, the carrier has the right to conduct an audit. Audits usually occur 90 days prior to the next renewal date, however, the carrier can conduct audits mid-year. If the group no longer qualifies for group insurance, per the underwriting guidelines from the carrier, the group policy can be canceled.