A Virginia business employed an average of 50 employees during the preceding calendar year. Under Va. Code § 38.2-3431, how is the business classified for the small-employer market provisions?

Why D is correct

Va. Code § 38.2-3431 defines a small employer as one that employed an average of at least 1 but no more than 50 employees during the preceding calendar year, so a business averaging 50 employees falls within the small-employer market provisions. A self-employed owner with no other employees counts as an employee for this definition. The Virginia Bureau of Insurance administers the small-employer market rules built on this definition.

Why the other options are wrong

• A) The statutory ceiling is 50 employees, not 25; an employer averaging 50 is within the small-employer definition.
• B) Employers averaging 51 or more are large employers; 30 or more is not the large-employer threshold.
• C) Self-employed owners with no other employees count as employees, so an owner's presence does not disqualify the business from small-employer status.

Memory hook

One to fifty is small — and owners count as employees too.

Why C is correct

Va. Code § 38.2-3431 defines a small employer as one that employed an average of at least 1 but not more than 50 employees during the preceding calendar year; an employer of 51 or more is a large employer. The statute also counts a self-employed owner with no other employees as an employee for this purpose, so even a one-person business can qualify. This average-based head count is the gateway definition for the availability and renewability protections Virginia provides to small employer medical plans.

Why the other options are wrong

• A) An employer of 100 or more is well past the small-employer band; the range at Va. Code § 38.2-3431 tops out at 50.
• B) 51 or more employees makes the employer a large employer, not a small one, under Va. Code § 38.2-3431.
• D) A self-employed owner with no other employees counts as an employee under Va. Code § 38.2-3431, so the definition is not limited to payrolls of zero.

Memory hook

Small means 1 to 50 — the owner counts too.