How -- and why -- to become a "group of one"

In a couple of weeks, changes to Washington state law will make it easier for sole proprietors and some self-employed individuals to get affordable health insurance coverage.

The change involves small group coverage, which under state law in recent years has meant entities (such as small businesses) of 2 to 50 employees. They could qualify for health coverage in the small group market, which doesn't require a health screening.

One-person businesses, however, have had to seek coverage in the individual insurance market, where health screening is the norm and coverage can be hard to find (and expensive) for folks with pre-existing medical conditions.

By Oct. 1, 2010, however, state law will consider 1 person a "group" for insurance purposes. This means that sole proprietors, for example, will be able to qualify for the group coverage.

There are some provisions to ensure that the business is bona fide, however. In general, the law requires people to show that:

-they've been employed by (or run) the same business for at least the last 12 months,
-they've made at least 75 percent of their income (or 51 percent for agricultural businesses) from the business or trade.

The bill changing the law was Senate Bill 6538, prime-sponsored by Sen. Karen Keiser and co-sponsored by Sen. Cheryl Pflug. Similar changes to federal law have been approved by Congress and signed by the president -- they're included in the federal health reform legislation passed this spring -- but don't take effect until 2014.

To find out more, talk to your insurance agent or broker, or call us -- the Washington state insurance commissioner's office -- at 1-800-562-6900.

Note: This post was corrected to indicate that the federal changes don't take effect until 2014.