Florida’s answer starts at one. The state’s small-employer definition at Fla. Stat. § 627.6699(3)(v) begins with a single employee and runs to 50 employees, so a Florida business with one employee on the first day of its plan year is already inside the band the Employee Health Care Access Act was written around. The other number in play — 50 full-time employees — is a federal line, and it does something completely different. The two lines are drawn by different governments, counted by different rules, and written for different purposes, and an employer who treats them as one number will answer both questions wrong.
The sentence Florida’s number comes from
Florida’s definition sits at Fla. Stat. § 627.6699(3)(v), inside the Employee Health Care Access Act. For a plan that is not grandfathered, the statute reads:
“For a nongrandfathered health plan, any employer that has its principal place of business in this state, employed an average of at least 1 but not more than 50 employees on business days during the preceding calendar year, and employs at least 1 employee on the first day of the plan year. As used in this subparagraph, the terms ‘employee’ and ‘employer’ have the same meaning as provided in s. 3 of the Employee Retirement Income Security Act of 1974, as amended, 29 U.S.C. s. 1002.”
Three things have to be true at once, and only one of them is a headcount. The employer must have its principal place of business in Florida. Under § 627.6699(3)(v) it must have employed an average of at least 1 but not more than 50 employees on business days during the preceding calendar year. And it must employ at least 1 employee on the first day of the plan year.
That middle requirement is an average over a whole year of business days, not a snapshot. A Florida employer that runs seasonally, or that hired hard in one quarter, is not counted at its peak. It is counted across the year that has already finished.
The condition that is easy to read past
“Has its principal place of business in this state” is a condition of the definition, not a piece of scenery attached to it. It appears in both limbs of § 627.6699(3)(v) — the grandfathered one and the nongrandfathered one — and nothing in the definition offers a way around it. Employing people at a Florida worksite is not the same thing as having your principal place of business in Florida, and the statute asks for the second.
There is a federal rule that uses words close enough to cause trouble. In the small group market, 45 CFR 147.102(a)(1)(ii)(B) selects a rating area using “the group policyholder’s principal business address.” That rule decides which geography a rate is built on. Florida’s § 627.6699(3)(v) decides whether the employer is a Florida small employer in the first place. Similar words, two entirely different jobs, and merging them produces a confident answer to a question nobody asked.
Grandfathered plans are counted by a different rule
Florida splits its own definition. The grandfathered limb at § 627.6699(3)(v)1 reaches “any person, sole proprietor, self-employed individual, independent contractor, firm, corporation, partnership, or association that is actively engaged in business, has its principal place of business in this state, employed an average of at least 1 but not more than 50 eligible employees on business days during the preceding calendar year, the majority of whom were employed in this state, employs at least 1 employee on the first day of the plan year, and is not formed primarily for purposes of purchasing insurance.”
Set the two limbs side by side and four differences show up. The grandfathered limb counts eligible employees rather than employees. It requires that the majority of them were employed in Florida — a second geographic test on top of the principal-place-of-business one. It requires the employer to be actively engaged in business. And it excludes an entity formed primarily to buy insurance.
The same subparagraph adds that in determining the number of employees, companies that are an affiliated group as defined in s. 1504(a) of the Internal Revenue Code of 1986 are considered a single employer. That aggregation sentence lives in the grandfathered limb. It is worth knowing which limb you are reading before you decide whether two related Florida companies count once or twice.
What Florida means by an eligible employee
Because the grandfathered limb counts eligible employees, the definition of that term does real work. Florida defines an eligible employee at § 627.6699(3) as an employee working full time, with a normal workweek of 25 or more hours, who has met any applicable waiting-period requirements. Part-time, temporary and substitute employees are excluded from the term.
A sole proprietor, an independent contractor or a self-employed individual is treated as a small employer only if all of the conditions and criteria established in the section are met — the statute says so expressly, rather than leaving it to inference.
Florida law counts to more than one number
The 1-to-50 definition at § 627.6699(3)(v) is not the only headcount in Florida’s small-group statutes, and the others are not decoration.
Guaranteed issue is written to a narrower group. Fla. Stat. § 627.6699(5)(b) provides that every small employer carrier must, as a condition of transacting business in the state, “offer and issue all small employer health benefit plans on a guaranteed-issue basis to every eligible small employer, with 2 to 50 eligible employees, that elects to be covered.”
That is 2 to 50 eligible employees, not 1 to 50 employees, and it is a different sentence from the definition.
Florida’s continuation-of-coverage law draws a third line. The Florida Health Insurance Coverage Continuation Act defines small employer by reference to § 627.6699 and then narrows it: § 627.6692(4)(h) applies the act to an employer “who for purposes of this section employs fewer than 20 employees.”
A fourth appears in the Small Employers Access Program at § 627.6699(14)(d)1, whose eligibility clause describes a small employer that “employs up to 25 eligible employees on business days during the preceding calendar year, employs at least 2 employees on the first day of the plan year, and has had no prior coverage for the last 6 months.”
That program is established in the current Florida Statutes. Whether it is funded or operating today was not established for this post, and nothing here should be read as saying an employer can enroll in it.
Four headcounts, one chapter. The practical consequence is that “are we a small employer in Florida” is not a single question with a single answer — it is a question you have to ask once per provision.
The federal line at 50 full-time employees is a different line entirely
Federal law does not use Florida’s band and is not trying to. The regulation defines an applicable large employer at 26 CFR § 54.4980H-1(a)(4):
“Applicable large employer. The term applicable large employer means, with respect to a calendar year, an employer that employed an average of at least 50 full-time employees (including full-time equivalent employees) on business days during the preceding calendar year.”
The parenthetical is the reason to cite the regulation rather than the statute. 26 U.S.C. § 4980H(c)(2)(A) describes an employer that employed an average of at least 50 full-time employees on business days during the preceding calendar year, and the words “including full-time equivalent employees” are not in that sentence. They reach the statute by another route and are made explicit in the regulation. An employer counting heads off the statute alone will undercount.
And what the federal line triggers is not an order to buy insurance. Under 26 U.S.C. § 4980H(a), if an applicable large employer fails to offer its full-time employees and their dependents the opportunity to enroll in minimum essential coverage, and at least one full-time employee has been certified as having enrolled in a qualified health plan with an applicable premium tax credit or cost-sharing reduction, then an assessable payment is imposed. Two conditions, then a tax consequence. The IRS puts the practical upshot plainly: “The vast majority of employers will fall below the ALE threshold number of employees and, therefore, will not be subject to the employer shared responsibility provisions.”
Set the two lines next to each other and their purposes separate cleanly. Florida’s band decides who a carrier must sell to on a guaranteed-issue, modified-community-rated basis. The federal line decides who is exposed to an assessable payment for not offering. Neither one tells a Florida employer whether it wants a plan.
What the headcount does not settle
Clearing Florida’s definition does not mean a carrier will simply issue whatever you ask for on whatever terms you like. Federal guaranteed availability at 45 CFR 147.104 is expressly “subject to paragraphs (b) through (d) of this section,” and that is where minimum participation and employer contribution requirements live. Those requirements are real, they sit outside the guaranteed-issue promise, and they are set by state law where a state sets one and otherwise by what issuers in that state customarily use. An employer that cannot meet them is not simply declined — the issuer may restrict that employer to a defined annual enrollment window.
The counting basis is worth carrying into the conversation: participation is measured against the employees who were offered coverage, and an employee already covered elsewhere — another group plan, government coverage, or coverage bought individually — counts toward the requirement rather than against it.
What to have ready before you ask
Florida’s test is retrospective and documentary. It asks for an average across the business days of the preceding calendar year, a headcount on the first day of the plan year, and a location. That means the answer lives in payroll records rather than in a current org chart, and an employer who pulls those records first will get a straight answer instead of an estimate. If your business sits near either end of the band, or if your principal place of business is a genuine question rather than an obvious one, those are the two facts to put in front of a licensed agent before anything else.
The bottom line
Florida’s small-employer definition starts at one employee, stops at 50, and also asks where your principal place of business is. The federal line at 50 is drawn by a different government, counted a different way, and answers a different question.
Frequently asked questions
Does one employee count in Florida, or do you need at least two?
It depends which sentence of the statute you are reading. Florida’s definition of a small employer at Fla. Stat. § 627.6699(3)(v) is an average of at least 1 but not more than 50, with at least 1 employee on the first day of the plan year. The guaranteed-issue duty a few subsections later is written to a narrower group: § 627.6699(5)(b) requires every small employer carrier to offer and issue small employer health benefit plans on a guaranteed-issue basis to every eligible small employer “with 2 to 50 eligible employees” that elects to be covered. Those are two different bands in one statute, and they should not be merged. If your headcount sits at the very bottom of the range, that difference is the first thing to raise with a licensed agent.
Are part-timers included when Florida counts our employees for the 1-to-50 band?
Again it depends on the limb. For a nongrandfathered health plan, § 627.6699(3)(v)2 counts “employees,” and says the terms employee and employer carry the meaning given in s. 3 of the Employee Retirement Income Security Act of 1974, 29 U.S.C. s. 1002. For a grandfathered health plan, (3)(v)1 counts “eligible employees,” and Florida defines an eligible employee as an employee working full time with a normal workweek of 25 or more hours who has met any applicable waiting-period requirements, excluding part-time, temporary and substitute employees. So a workforce of part-timers can move the count under one limb and not the other.
Our parent company is headquartered outside Florida. Are we a Florida small employer?
Both limbs of § 627.6699(3)(v) require the employer to have “its principal place of business in this state.” That is a condition of the definition itself, not a formality attached to it, and having employees at a Florida worksite does not satisfy it on its own. The statute states the requirement; it does not define the phrase in the text quoted here, and no Florida administrative rule was retrieved for this post. An employer whose principal place of business sits outside Florida should put that question to the carrier or to a licensed agent before treating Florida’s small-group rules as the ones that apply.
If we pass 50 employees, does federal law make us offer coverage?
Not in those words. 26 U.S.C. § 4980H(a) is written as a conditional: if an applicable large employer fails to offer minimum essential coverage to its full-time employees and their dependents, and at least one full-time employee has been certified as having enrolled in a qualified health plan with an applicable premium tax credit or cost-sharing reduction, then an assessable payment is imposed on the employer. There is no “shall offer” in it. It is a tax consequence with two conditions, not a command, and the counting is done under 26 CFR § 54.4980H-1(a)(4).
Does Florida require a private employer to offer health coverage at all?
No Florida statute reviewed for this post requires a private employer to offer health coverage. The Employee Health Care Access Act regulates what carriers must sell, not what employers must buy — § 627.6699(2) states its intent as promoting “the availability of health insurance coverage to small employers,” and § 627.6699(5)(b) has the employer “elect” to be covered. Two Florida duties do fall on a private employer that already has a plan: § 627.6645(1) requires a policyholder to forward the carrier’s expiration, cancellation or nonrenewal notice to each certificateholder, and § 627.6577(1) requires an employer contributing to a closed-panel dental plan to provide an alternative giving the insured a free choice of dentist. Public employers sit under a separate regime with its own conditional duties.
About the author
Nate Jones, CPCU, is the founder of Wexford Insurance and Wexford Health Insurance, an independent agency placing small-business group benefits in 9 states. He works with Florida employers on where a headcount lands them under the Employee Health Care Access Act and under the federal applicable-large-employer rules. Start with the Wexford Health Insurance quote form.