Husband & Wife Group No More?

junkman

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I ran into a 2 person husband and wife group that are each currently covered as employee only. They have extended their renewal to 12/31/2014 but the carrier no longer considers groups with owner & spouse as legitimate groups.

I haven't checked with the carrier but am thinking claims might be denied if the carrier understands (notices) that the group has no other employees and is ineligible for coverage under current guidelines.

One of them has had significant health problems & doesn't want to goover $5,000 out of pocket.

The other kicker is that they have a child covered under a child only policy from back when those contracts were still available. Premium is only $38 for a $5,000 HDHP plan. The premium would be ~$90 if enrolled with a parent ion a new individual policy with a parent but the out of pocket would more than double to $10,600.

Question: Should they bail to individual policies during open enrollment for a 4/1 effective date? What's going to happen to child only coverage at renewal?
 
Where's the written notice from the carrier stating they are no longer a group? I would want to see the legal language, before I did anything else. If the language says their group will terminate at renewal (in this case, 12/1/14), I would go ahead and cancel it 3/31 and go with an individual policy for the husband/wife, while keeping the child on the current plan as long as possible. Otherwise, they may be without coverage for Dec 2014. If its decided that the child only policy terminates at a later date due to ACA or state regs, that will trigger an SEP.
 
I'll have to ask a hypothetical question of the carrier. There is a carrier form used to determine size under ACA. The group is kept in whatever size category they were in the previous year if they don't answer.

One of the questions is to the effect of "do you have a common law employee in addition to yourself?" A spouse doesn't qualify as a common law employee and therefore the group gets is termed because they need at least 1 employee in addition to the owner.

I've set up groups for friends who couldn't pass underwriting for an individual policy under the old rules. Individual underwriting used to go back.forever on some questions. Group only went back 5 yrs. Sometimes a stroke or heart attack etc wouldn't even show up on a group app if they'd been treatment free for 5 yrs.

This particular couple has been on a group contract at least 10 yrs & doesn't want to go to individual at least until things settle down. Still, I don't want to advise them to stay where they are and have coverage canceled retro. That may put them outside any guaranteed issue anything.
 
I'll have to ask a hypothetical question of the carrier. There is a carrier form used to determine size under ACA. The group is kept in whatever size category they were in the previous year if they don't answer.

One of the questions is to the effect of "do you have a common law employee in addition to yourself?" A spouse doesn't qualify as a common law employee and therefore the group gets is termed because they need at least 1 employee in addition to the owner.

I've set up groups for friends who couldn't pass underwriting for an individual policy under the old rules. Individual underwriting used to go back.forever on some questions. Group only went back 5 yrs. Sometimes a stroke or heart attack etc wouldn't even show up on a group app if they'd been treatment free for 5 yrs.

This particular couple has been on a group contract at least 10 yrs & doesn't want to go to individual at least until things settle down. Still, I don't want to advise them to stay where they are and have coverage canceled retro. That may put them outside any guaranteed issue anything.

I have quite a few 2 person groups, for the same reason. Or maternity.

I would call your department of insurance and ask them, also
 
Your 2 person groups wouldn't like it if they got bounced and you didn't have a plan or if they get hit with 2 deductibles because the group was termed mid year.

I doubt Blue Cross cares if a 2 life case leaves. 200 lives they care about (a little) or at least act like they care.
 
Mine all have both names listed on the incorporation documents, with K-1's to verify. I'm not too worried ;)
 
Mine all have both names listed on the incorporation documents, with K-1's to verify. I'm not too worried ;)

That doesn't make a "Common Law" employee and they would not be eligible for a group if my understanding is correct.
 
I ran into this also. In late December BCBSAZ said they were still taking Mom & Pop groups, but their lawyers were watching it and might change their minds. The other carriers are letting it go to the next renewal when the group moves to an ACA plan.
 
I'm assuming if it goes to renewal (which for most of mine is 12/1/14) it will trigger a SEP. Thoughts?
 
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