I have a 50 y.o. male NS that has recently been dx with Hep c. It seems impossible to find IFP due to auto decline. He is a painting contractor by trade with several employees. I use the term "employees" loosely because I think they are independent contractors, but I will find out. In the meantime, can someone advise if selling him on the idea of forming a small group will aid him in getting health insurance coverage?
He would be eligible to participate in his own company's group plan, wouldn't he? His only other hope is to join the state high risk pool.... He doesn't have insurance now, so he is not HIPAA eligible.
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To be truly independent, an agent should not be dependent on a government bureaucrat for contracts or commissions.
Much depends on state law and how a small group is defined. Generally, most carriers require at least 2 full time W2 employees, 50% employer contribution and 100% participation for smaller groups (under 5 lives). There are some situations where you can get by with lower participation but it is a carrier by carrier situation.
Carriers must accept all applicants but can apply pre-ex waiting periods for those who do not have prior creditable coverage. Usually HMO's are more liberal and will cover pre-ex from day one.
When you add it all up, if he qualifies for the risk pool that may well be the least expensive route.
Now comes the question you should be expecting. Why is he uninsured and did he just decide to buy coverage once he was diagnosed?
Much depends on state law and how a small group is defined. Generally, most carriers require at least 2 full time W2 employees, 50% employer contribution and 100% participation for smaller groups (under 5 lives). There are some situations where you can get by with lower participation but it is a carrier by carrier situation.
Carriers must accept all applicants but can apply pre-ex waiting periods for those who do not have prior creditable coverage. Usually HMO's are more liberal and will cover pre-ex from day one.
When you add it all up, if he qualifies for the risk pool that may well be the least expensive route.
Now comes the question you should be expecting. Why is he uninsured and did he just decide to buy coverage once he was diagnosed?
Last first, the guy is a friend I met a little over a year ago... he is cheap... thought he had no money, but recently found out he is doing pretty well with his contracting business. Don't know fully why he never bought insurance, but he is recently divorced and now wants to cover his kids as well as himself. I approached him about a year ago about insurance for his business, but he put me off. Just had a doctor's appt this week, and I am waiting to hear the results.
I tried every carrier I am appointed with, but they all say Hep C is an auto decline.... before I gave up and advised him to apply for the state risk pook, I thought I would see about small group. He has several guys that work for him, and I have been trying to nail down if they are true employees or independent contractors, but can't get a definitive answer. The over-riding issue is, even if he qualifies for a small group, can he, as the owner, be part of the group? and if so, can he still be denied due to pre-ex?
I am not clear on whether pre-ex is a deciding factor when initally starting a new group. I am pretty sure once the group is formed that any new employees will be accepted under GI during the new hire period (waiting period aside).
The over-riding issue is, even if he qualifies for a small group, can he, as the owner, be part of the group? and if so, can he still be denied due to pre-ex?
Yes and no.
He can be part of the group, that's not a problem.
Most states mandate GI on groups from 2-50 lives. Hell, here in Florida, groups of one are GI during the open enrollment month of August. Expensive though.
Most can have a pre-x limitation (absent creditable prior) from 12-24 months...
Group'll probably be better coverage than the state risk pool, but of course cost is always a consideration...what's that term? Premium tolerance?
Hope that helps.
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[COLOR=blue]Don't steal - the government hates competition.[/COLOR]
even if he qualifies for a small group, can he, as the owner, be part of the group? and if so, can he still be denied due to pre-ex?
Can't be denied, but they may not cover the pre-ex since he does not have prior creditable coverage. This was addressed earlier.
I am not clear on whether pre-ex is a deciding factor when initally starting a new group. I am pretty sure once the group is formed that any new employees will be accepted under GI during the new hire period (waiting period aside).
What do you say?
Existing medical conditions are factored into the rates. Common terminology is RAF (risk adjustment factor). It varies by state, size of the group, type of plan, etc.
In GA the max load is generally 67% (with some variations). That means the final rate would be std rates + 67% to cover existing medical conditions.
I have some small groups paying $1800 per month (two lives) and the carrier is STILL losing money and has since day one.
Existing medical conditions are factored into the rates. Common terminology is RAF (risk adjustment factor). It varies by state, size of the group, type of plan, etc.
In GA the max load is generally 67% (with some variations). That means the final rate would be std rates + 67% to cover existing medical conditions.
I have some small groups paying $1800 per month (two lives) and the carrier is STILL losing money and has since day one.
That was what I was getting at... I was thinking that here would be a case where an employer would be offering group insurance for his employees meanwhile contaminating the pool... kinda like inviting your friends over for a swim in your backyard pool, and you pee in it after they get in.
Thanks for the help.... I think I know what to do at this point.
In general most carriers will load the Group Health Rates for groups of 10 and under since they are required to insure groups of 2 or more. You should just get some Group Health quotes and compare them. Be certain to inform the Group Carrier you request a quote from about all of the medical conditions so they can produce a real quote. The more employees on his Group Plan the better the rates will be. Use carriers that are in the 10 and under market, don't force a carrier to quote even if you want to use them, their rates would be uncompetitive anyway.
If this client is cheap what sales pitch did you give him on why he should pay for a % of his employee's premium for a group plan? I would explain what the requirements are for the the employer to set up a group plan. Also go into details of pre x. If he is still interested then quote a group plan.
Since he just went through the big "D" the courts could be requiring him to cover his kids health insurance. Put the kids on an individual plan. You should get that sale out of this.
If this client is cheap what sales pitch did you give him on why he should pay for a % of his employee's premium for a group plan? I would explain what the requirements are for the the employer to set up a group plan. Also go into details of pre x. If he is still interested then quote a group plan.
Since he just went through the big "D" the courts could be requiring him to cover his kids health insurance. Put the kids on an individual plan. You should get that sale out of this.
Yeah, I already talked to him about the kids. He didn't know he could get a policy just for them.
I feel sorry for him... he is looking at some very big Rx costs, my guess is first year about $20K. After that it should taper off.
I am weak in this area.... my expertise has been Medicare. I have only started studying the IFP and Group regs/policies for about a year. However, IFP is out of the question because Hep C is an auto decline. He says if he has to go to the state high risk pool, he will just do without.
Since he has a small construction company, I thought getting him to start a group would be not only good for him, but his employees (as long as his issue doesn't run up the tab for his guys). He approached me a year ago about setting up a group plan, but put it off. Now that he finds he has Hep C, the picture has changed somewhat. Isn't this often the case????
[quote=retread;127471]Yeah, I already talked to him about the kids. He didn't know he could get a policy just for them.
I feel sorry for him... he is looking at some very big Rx costs, my guess is first year about $20K. After that it should taper off.
I am weak in this area.... my expertise has been Medicare. I have only started studying the IFP and Group regs/policies for about a year. However, IFP is out of the question because Hep C is an auto decline. He says if he has to go to the state high risk pool, he will just do without.quote]
Your client is a fool if he goes with out. Tell your client that the state risk pool would give him a degree of asset protection.
Yeah, I already talked to him about the kids. He didn't know he could get a policy just for them.
I feel sorry for him... he is looking at some very big Rx costs, my guess is first year about $20K. After that it should taper off.
I am weak in this area.... my expertise has been Medicare. I have only started studying the IFP and Group regs/policies for about a year. However, IFP is out of the question because Hep C is an auto decline. He says if he has to go to the state high risk pool, he will just do without.quote]
Your client is a fool if he goes with out. Tell your client that the state risk pool would give him a degree of asset protection.
Already discussed this.... I'm not completely brain dead!
His condition will run up the tab for his employees. The insurance company cannot "discriminate" against any one employee so the entire group gets the rate up.
If he wasn't divorced I would have said make his wife an employee and write the group by excluding the 1099. Of course there might be tax consequences but that's better than a 20k rx bill. If he has one true employee (w-2) he might be able to get around it by saying the rest of his employees are 1099. Other than that it's the high risk pool
If he wasn't divorced I would have said make his wife an employee and write the group by excluding the 1099.
With the exception of a few states - generally a husband and a wife can not constitute a small group. In order to qualify, you would need an additional full time employee.
Kind of a moot point since their divorced - but I figured I'd chime in.
I am sorry I seem to be missing one critical piece of information. Why does he not have coverage in place NOW?
I think that's a question you would have to ask all uninsureds. I think it comes down to at least two groups: 1) those who can't afford the premiums and 2) those who don't want to pay the premiums.
In his case, I think he had insurance through his former wife's group, but now recently divorced and with pre-ex he is faced with high monthly costs he hasn't had to deal with before. It appears he is too stubborn to recognize that he has been walking on thin ice, and thinks that even now with this recent proposition of high drug costs due to his dx, thinks that he can somehow find the means to self-insure.
He seems to be a prime candidate for a HSA, but in a group context, not IFP. At least that is the approach I am taking at this time. You can't always lead a mule to water, and you certainly can't make him drink. I like this guy, he is a friend.... he is just very difficult to educate.
This is common to many independent contractors, not just him. These guys should be commended on their ability to succeed in business without relying on some company to provide them a living. However, this independent spirit can get in the way sometimes. Sound familiar?
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Originally Posted by IAC.Ryan
With the exception of a few states - generally a husband and a wife can not constitute a small group. In order to qualify, you would need an additional full time employee.
Kind of a moot point since their divorced - but I figured I'd chime in.
I think he has several men on W-2 status and several others on 1099s. I would like to try to recruit as many total as I can to get the group size up. No telling what other pre-exs I will find....
Last edited by retread : 01-22-2009 at 01:18 PM.
Reason: Posts merged
These guys should be commended on their ability to succeed in business without relying on some company to provide them a living. However, this independent spirit can get in the way sometimes. Sound familiar?
In his case, I think he had insurance through his former wife's group, but now recently divorced and with pre-ex he is faced with high monthly costs he hasn't had to deal with before.
I thought when you get divorced there is some COBRA provision?
Can some group expert chime in if I am incorrect for my own knowledge?
I thought when you get divorced there is some COBRA provision?
Can some group expert chime in if I am incorrect for my own knowledge?
20 total employee's qualifies the group for Cobra and yes this guy would have been able to elect Cobra.
My experience with this industry is these people don't care about health insurance. You can write a policy on them and they will drop it 3 months latter. Now if you do have a prospect that has employees and is really trying to grow their business then a group health plan can be an easy sell.
Its getting through underwriting that can be the hard part.
20 total employee's qualifies the group for Cobra and yes this guy would have been able to elect Cobra.
What about state continuation? I believe in Texas there is a 6 month state continuation? Is this a Texas thing only? Any ideas?
My experience with this industry is these people don't care about health insurance. You can write a policy on them and they will drop it 3 months latter.
Need Help for Hep C Client
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