I was given a referral for a guy that is a house painter (sole proprietor - no employees). Colorado does not require Workman's Comp. for owners. He is currently covered under a group policy (Great West) from his wife's job.
There is a clause in the policy that states he is not covered if he is injured while engaging in a "for profit" business. He will fax me the exact wording but for now, that is the way it was explained to me. He wants a HD plan that will cover him while working but they also want to keep the group plan = low deductible, benefit rich, better coverage for illness. I still need to find out how much they are paying for him to be on the group.
Anyway, I have never run into this before - is that a normal clause? I called Aetna and inquired as to how the coordination of benefits would work if he had both individual and group coverage - they did not know and will call me back. He would only need individual if he had an accident while at work - if he gets sick, they want the group benefits.
Obviously, I do not want to see someone have "double coverage". It seems to go against principle. I think the proper answer is for him to take out workman comp. ins - but I have been told that it is expensive and he would be better off on an individual plan. Thoughts???
Last edited by BKrocko : 06-27-2007 at 08:09 PM.
Reason: spelling
Thanks Bob,
I think there are a lot of blue collar sole proprietors out there that are on the spouse's group plan. I bet they have no idea that they are not covered for an injury while on the job. If they are NOT required to carry Workman's Comp (Colorado) - then they are up a creek without a paddle!
I thought it would be the other way around - If they carry WC, then WC will cover the costs but if they don't, then whatever insurance they have in place should cover it. Looks like another reason we can give them to consider individual coverage when they say "I'm covered under my spouse's group plan". GoldDoor could use this answer to his recent post pertaining to that subject.
It's actually a great pitch line I had never thought of before. Just to be safe I am going to check with a few group carriers & see what they say about on the job injury. My guess is all have that exclusion but I would like to be sure before using it on someone.
I'm sitting here and saying "Duh", as I know several this would effect big time.
The light bulb went on in Atlanta too . . .
Realtors come to mind right off the bat.
They are 1099 so not even eligible for WC. Spend all day (and night and weekends) in the car going to, coming from a showing or closing. Basically "on the job" 24/7.
Walking around new construction, old houses. Lot's of things can happen.
"Yeah, but I am covered under my husbands/wifes policy."
That's what I'm talking about! This guy is a house painter (outside) and goes up and down the ladder/scaffling etc. I can also see plumbers/lawn care/handy man/etc.....I never knew about that clause, It is a hugh hole in group coverage for self employed spouse's.
The fact that they also want to keep the group coverage for him in this situation is problematic. The person at Aetna was also questioning if coverage would apply to "on the job injury" using an individual policy for all cases. I explained that WC would not be a player in this situation because there is none. She was still insistent that it may not be covered but did not know definitively. I think she is wrong but if she is correct, that would really suck. If individual policies don't cover OTJ injuries, the only solution is to pick up the tab for WC on themselves.
You can do that in MD to. The business owner can decline worker comp on himself and just have it for his employees. The theory is you can't sue yourself.
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I bring that up and have sold a few policies when I mention that to small biz owners who have a group plan. I ask them if they opted out of workers company. If they say yes I inform them that they most likely do not have coverage on the job and to call their insurance company to verify.
Arnguy - That is also a possibility but I have never liked limited plans. He will get an accident policy no matter what but I will need to research hospital plans. Valid suggestion - thank you.
I think he is still screwed as he is a dependent under his wife's plan right now. I know our state allows business owner's to waive wc requirements under "Their" plan, a plan that they own and pay premiums on. Right now, his otj injuries could be rejected the way he is set up. If anything, you might have a strong basis for a sale just on that factor.
An insurance carrier "agrees" to waive the WC requirement aspect on the owners of a business... not employees dependents.
Also while he can stay as a dependent on his wife's plan, if he buys another (and he should) her plan becomes secondary payer so even if he went to a high deductible, her plan wouldn't pay until afterwards.
Weird Group Clause
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