Insurance Agent Forum

[ajtour42]

Help!

I have a restaurant owner who would like to cover his core group of employees: himself, a day cook, a night cook, and a manager. Everyone else who works for him is, at least at their establishment, considered part-time. The owner will be funding the premiums for this 4-person group at 100%.

One carrier has told me that EVERYONE who works 25+ hours must be offered the group plan. Is that a State law (Ohio) or a carrier rule? If it's a carrier rule, does anyone know of a carrier who will let the employer determine the # of hours required to be considered full-time?

In short, what's the best way (legally, of course) to help this restaurant owner cover his 'core group' of employees? This restaurant, like many others, has lots of turnover and he simply can't afford to cover everyone who happens to hit 25 hours. Make sense?

Many thanks in advance!!!

[CHUMPS FROM OXFORD]

I googled and googled and couldn't find anything. As I mentioned, I don't get too involved in group coverage. Maybe someone who deals in group coverage can chime in.

[somarco]

The easiest way, if all are healthy, is to write individual policies.

You can also write a group plan depending on carrier rules and small group laws in your state. In GA (and other states) you can write a carve out group as long as you establish employee classes in a non-discriminatory fashion. Put the 4 employees in one class and everyone else in another. As long as there are no cooks or managers among the other employees you should be home free.

Another way is to offer a rich benefit plan to class 1 employees and a much lesser plan to the grunts. He would still have to contribute to the grunts but that is another option.

Unless there is something squirrelly about small group laws in your state, you were talking with a rep that doesn't know what they are doing.

[Dave020]

In CA, group class carveouts (except Kaiser) usually have to be 8 or more and are fully underwritten (and can be declined). Restaurants are a toughy as there is high employee turnover, at least out here.

You could tag the employees the owner wants to cover as "management" and the others as non-management, I have done that before, but you need to see if the carrier will allow that kind of carve-out.

Other than that, Somarco's idea of offering lesser coverage to the non management employees would be an idea.

Dave
The David Fluker Health Insurance Agency - Gilroy, California - Serving California Residents Since 1995

[somarco]

State variations come in to play again.

In GA all that is needed is 2 in each class. I have one carrier that will offer 3 classes up to 10 lives (and on as few as 6).

Just recently I wrote a 4 person group. Mom & pop in a management class and the two grunts in a separate class. I also used a carrier that does step rates on group vs. average rates. Mom & pop are in their late 40's and pop is uninsurable (hence the group). The grunts are mid 20's so their rate is about a third of mom & pop even before the loads & rate adjustments for different benefit levels.

I usually don't go to that much trouble on a 4 life group but in this case it just made sense.

Another thing we did was set a 90 day wait for new hires. Even though this company doesn't have a lot of turnover, no need to put someone on the plan the first month if they don't have to.

You can set class distinctions by job title (management vs. non-management) or pay (salaried vs. hourly).

[arnguy]

The carrier I write small groups through in SE PA requires that only workers who work 30 hours or more a week can qualify for coverage. I haven't run into the part-time problem so I am not certain what the PA law is on this subject.

[Delta76]

I would agree with the above, unless there is some health problems. Write individual policies and bonus $X amount to cover the premium for all employees who work over 35 (or whatever he chooses) per week. If there are health issues, some states have a guaranteed risk pool, so there wouldn't be any problems, but I'm not sure about Ohio.

[ajtour42]

Thanks for all your answers! Everyone the employer wants to cover already has individual insurance. He's simply trying to get the rates down. And, yes, there are significant health issues with all of them -- hence, the group idea. I'll call carriers directly on Monday and let you know what they tell me.

American Community already said "everyone who works 25+ hours/week must be offered coverage." Also, no 1099's are eligible with AC.

Anthem also says "everyone who works 25+ hours/week must be offered coverage." They, however, will accept 1099's.

Need to call Aetna, Medical Mutual, and Assurant (although I understand Assurant isn't real competitive in the group market).

Anyway, thanks very much for your $0.02. I'm especially interested in the ability to offer coverage by class (i.e. management vs. non-management; cooks vs. waitresses, etc.) and look into that!

[somarco]

I suspect you are not asking the right questions. I don't know of any carrier that requires 100% participation. Most (if not all) allow those with current coverage to opt out.

25 hours is low, but perhaps this is a state by state issue.

You wont get the rates down with group over individual.