Small Group Health - Odd Avoiding of Min Eligible Requirement

ebbrown · 09-03-2009, 01:03 PM

I'd greatly appreciate thoughts on this one. In my state, to qualify for a small group health plan, a company must have at least two eligible employees. An organization wishes to cover only one of its several employees. They have been told that all they need to show a carrier is that they have two or more full-time eligible employees. But they do NOT have to prove that they have actually offered the coverage to these employees. The broker feels this is a loophole to meet the requirement for minimum eligibles and still buy coverage for only one employee. On the surface, this sounds like it could be legit even if a bit shady. Is this true? And if it is indeed not legit, what potential liability might the organization face from the carrier (refusal to cover?) and the other employees (demand coverage?). Thanks very much.

IAC.Ryan · 10-13-2009, 01:19 AM

Originally Posted by ebbrown

I'd greatly appreciate thoughts on this one. In my state, to qualify for a small group health plan, a company must have at least two eligible employees. An organization wishes to cover only one of its several employees. They have been told that all they need to show a carrier is that they have two or more full-time eligible employees. But they do NOT have to prove that they have actually offered the coverage to these employees. The broker feels this is a loophole to meet the requirement for minimum eligibles and still buy coverage for only one employee. On the surface, this sounds like it could be legit even if a bit shady. Is this true? And if it is indeed not legit, what potential liability might the organization face from the carrier (refusal to cover?) and the other employees (demand coverage?). Thanks very much.

What state is this in? There are only a few states that allow a "group of 1"

Also, for the most part I've seen 100% participation required for groups of 5 lives or less.

VolAgent · 10-13-2009, 01:50 AM

The fact that the employer doesn't want to tell the other employees suggests that they would be eligible to participate in the group. If so, wouldn't the employer be liable under ERISA? Why not design a carve out to cover the desired employee and be legit?

Health Insurance St Pete · 10-14-2009, 04:50 PM

For Small Group health insurance and any type of coverages you want plz contact Group Health Insurance, Small Business Group Health Insurance, Florida
Or other contact details are :-

Perfect Health, LLC
128 59th Avenue South
St. Petersburg, Florida 33705

ABC · 10-14-2009, 07:06 PM

What you are attempting to do is illegal.

An employee that is not offered coverage could come back and sue the employer and they would have a case.
So if employee X blows out his knee and gets a $36,000 surgery he could come back on the employer and sue for damages and win.

2nd issue.
You would be creating fraud with insurance carrier in the set up of the plan. So if that one employee, who let me guess is the owner, has a knee surgery for $36,000 and the carrier does an audit of the case. The audit show that the group was not set up properly in the first place can get out of paying that claim.

By attempting to set up a employer sponsored group health plan in this manner you are opening the door to way too much risk.

Ebbrown & Health Insurance St Pete........can i get a IP address check?