Small Group Services 2-50 Employees Effective January Colorado Underwriting Guidelines. BCOHB3397A Rev. 01/14

Transcription

1 Small Group Services 2-50 Employees Effective January 2014 Colorado Underwriting Guidelines BCOHB3397A Rev. 01/14

2 Important contact information Small group broker and underwriting services (BUS) team Anthem Blue Cross and Blue Shield P.O. Box Denver, CO Phone: Contact your dedicated Small Group BUS team or call (local) or (toll free) Fax: Quotes: Overnight delivery Anthem Blue Cross and Blue Shield Small Group Underwriting 700 Broadway, Mail Stop CO Denver, CO Small group member customer service Phone: Hours of operation: Monday-Friday 7:30 a.m.-5:30 p.m. Mountain time Anthem Connect (Dental) Anthem Blue Cross and Blue Shield Dental Administrative Offices P.O. Box 1171 Minneapolis, MN Enrollment/billing Phone: Fax: Premium payments Anthem Blue Cross and Blue Shield P.O. Box Los Angeles, CA Group administrator/agent support Anthem Blue Cross and Blue Shield Membership Department P.O. Box Denver, CO Phone: Hours of operation: Monday-Wednesday and Friday 8 a.m.-5:30 p.m. Mountain time Thursday 8 a.m.-3:15 p.m. and 4:30 p.m.-5:30 p.m. Mountain time Producer Toolbox Anthem.com Summary of Benefits and Coverage sbc.anthem.com Phone: Fax: Connect@AnthemDentalAdmin.com

3 Table of contents Important contact information...inside front cover Introduction...3 Section 1 Overview of the underwriting process 1. Requirements for completing forms Guidelines for completing forms Process Processing time specifications Evaluation criteria...5 Section 2 General underwriting guidelines for new business 1. Small group eligibility requirements Employer/employee relationship Ineligible categories Contribution Employee eligibility Employee participation requirements Health underwriting Health coverage Vision coverage Pediatric dental coverage Life and Disability coverage P.O.P. (Premium Only Plan) Rating policies Rate and benefit guarantee New group eligibility/effective date Waiting period...12

4 Table of contents Section 2 General underwriting guidelines for new business (cont.) 17. Takeover provisions (CRS ) Prior deductible and annual out-of-pocket maximum credit Eligible dependents Federal regulations State regulations Colorado business structure underwriting requirements..15 Section 3 General underwriting guidelines for existing business 1. Open enrollment Contract benefit modifications Plan modification job aid Group add effective dates Life insurance conversion...19 Section 4 Anthem Connect (Dental) 1. Enrollment Participation requirements Underwriting guidelines Medlock feature (Medical Lock) Prior coverage discounts Optional orthodontic coverage Maximum carry-over provisions...21 Section 5 Definitions 1. Declination Dependent Special enrollment period New hire Replacement group/members Virgin group/members Contributory Non-contributory...23

5 Introduction Small groups have several options for acquiring health coverage, which include but are not limited to applying with the SHOP small group exchange or applying directly with Anthem Blue Cross and Blue Shield. Small groups will not be able to combine these two options and must choose a single submission process. The guidelines in this manual are a statement of Anthem Blue Cross and Blue Shield s current general underwriting approach to small group business. Anthem Blue Cross and Blue Shield will strive to keep all parties informed of any changes to these guidelines in a timely manner; however, Anthem may change these guidelines at any time without prior notice. Future changes will be communicated as updates to the most current published guidelines. Only Anthem Blue Cross and Blue Shield small group underwriters may make the final decision to accept or decline a case or determine the rate level or an effective date. Agents are not authorized to bind or guarantee coverage or a specific rate level or effective date. Please remind all prospective groups to maintain their current coverage until Anthem Blue Cross and Blue Shield notifies them that we have accepted them for coverage. This Underwriting Guideline has been updated to comply with federal and state requirements, including applicable provisions of the recently enacted federal health care reform laws. As we receive additional guidance and clarification on the new health care reform laws from the U.S. Department of Health and Human Services, Department of Labor and Internal Revenue Service, we may be required to make additional changes. 3

6 Overview of the underwriting process Section 1 1. Requirements for completing forms The following documentation is required when submitting new business: a. A copy of the signed agent s quote (based on final enrollment). b. The most current Small Group Employer Application (Master Application). c. The most current applicable employee applications for all employees/dependents enrolling. d. Applications from all employees/dependents declining coverage. Employees declining medical coverage will need to complete section 6 on the Colorado Uniform Employee Application. Employees declining ancillary plans will need to complete Sections 2 and 3 of the Employee Enrollment Supplemental Application. e. Colorado law requires that all small employers that apply for coverage submit a complete list of eligible employees and dependents of eligible employees (and a list of employer-determined eligible employees and dependents, if this is a different list). f. A copy of the company s most recent Unemployment Insurance Tax Report (UITR) with the current employment status of all employees listed. Payroll will need to be submitted for any new hire not listed. If hired within 2 weeks of group application, a W-4 may be substituted. (See page 15 for a listing of alternative forms to validate business and employee eligibility when the UITR is unavailable.) g. If it is a group replacement case, a copy of the last month s group premium statement and list bill showing all employees currently covered. h. The last billing statement listing COBRA/ FMLA/Colorado State Continuation subscribers, if applicable. i. A company check for the first month s applicable coverage(s) made payable to Anthem Blue Cross and Blue Shield. j. Submit 100% of the premium with the applications for all applicable lines of coverage. k. For new business on any of the Anthem Lumenos Advantage plans, an HRA Agreement and Demand Debit Authorization form must be submitted with the Small Group Employer Application. 2. Guidelines for completing forms Guidelines for completing employer and employee applications for 2-50 small groups are as follows: All questions must be answered and all signatures and dates provided before Anthem Blue Cross and Blue Shield can begin processing the group s applications. If the group paperwork is incomplete, the underwriter may be unable to complete the underwriting process. a. For new group submissions, the employee s signature date cannot be more than 60 days before the requested coverage effective date. b. Employees may make alterations or changes to their Employee Application. The applicant must initial and date any changes made. c. See Section 2 for specific guidelines for business groups of one and groups of 2-50 with only one employee enrolling. 4

7 3. Process Underwriters evaluate small groups to determine any applicable tobacco adjustment factor(s) and whether the group qualifies for coverage under current state and federal requirements. 4. Processing time specifications Because processing within specific time frames is important, all forms and other documents submitted for evaluation must be accurately completed and included when the case is first submitted to Anthem Blue Cross and Blue Shield. a. Anthem Blue Cross and Blue Shield will accept new group submissions, with a requested effective date of the first or the 15th of the month up to the last day of the month before the requested effective date. b. If Anthem Blue Cross and Blue Shield receives incomplete forms, it cannot make a determination until it receives all the necessary information. c. When the information submitted is incomplete and subsequently not received in a timely manner, the group s application may be withdrawn for the month requested. 5. Evaluation criteria Underwriting is based on the following criteria: a. Business qualification b. Employee and dependent eligibility c. Tobacco use d. Employee participation e. Group demographics Groups may be declined if: a. A bona fide employer/employee relationship does not exist. b. The group is not subject to Colorado small group statutes. c. The group fails to meet Anthem Blue Cross and Blue Shield s eligibility requirements. d. Other such factors, as determined by Anthem Blue Cross and Blue Shield and subject to applicable law, apply. 5

8 General underwriting guidelines for new business Section 2 1. Small group eligibility requirements a. Small employer means any person, firm, corporation, partnership or association that Is actively engaged in business. Employed an average of at least one but not more than fifty eligible employees on business days during the immediate calendar year. Was not formed primarily for the purpose of purchasing insurance. b. In determining the number of eligible employees, companies that are affiliated companies, or that are eligible to file a combined tax return for the purpose of state taxation, will be considered one employer (as defined under sub section (b), (c), (m) or (o) of section 414 of the Internal Revenue Code of 1986.) c. Eligible employee is defined as a full time employee in a bona fide employer employee relationship reasonably expected to work at least a 30 hour work week. The term does not include: an employee who works on a temporary or substitute basis. an individual and his or her spouse or partner in a civil union with respect to a trade or business, whether incorporate or unincorporated, that is wholly owned by the individual or by the individual and his or her spouse or partner in a civil union. a partner in a partnership and his or her spouse or partner in a civil union with respect to the partnership, except that a partner and his or her spouse or partner in a civil union may participate in a small group plan established to cover one or more eligible employees of the partnership who are not partners in the partnership. d. To be classified as a small employer with more than one employee when only one employee enrolls in the employer s health plan, the employer must submit to Anthem Blue Cross and Blue Shield the two most recent quarterly employment and tax statements substantiating that the employer had two or more eligible employees. Such small employer groups must also meet Anthem s participation requirements. e. For a small employer group to be considered a business group of two or more, an eligible employee who could also be considered a dependent of the small employer must receive taxable income from the small employer in an amount equivalent to minimum wage for working full-time on a permanent basis. The groups most recent UITR or appropriate federal tax documents will be required. f. To determine whether an applicant meets the requirements for working a 30 hour work week on a permanent basis, Anthem Blue Cross and Blue Shield will adhere to the applicable Colorado Division of Insurance rules and / or regulations. g. An employer must use this calculation when determining if there group qualifies as a group of 2-50: Step 1: Count the number of employees who work 30hrs/wk or more on a regular basis (including seasonal). Step 2: Determine FTE (full time equivalent) by counting the total average part time hours (the hours for those employees who work less than 30hrs/wk), then divide by 30. For example: 6 employees who work on average of 20hrs/ wk=120 hours, divide that by 30=4 full time equivalent employees. Step 3: Add the total from step 1 and step 2 and if the total is 50 or less, small group statutes apply. 2. Employer/employee relationship a. An employer/employee relationship must exist. An employee who works a minimum of 30 hours per week is considered a full-time employee. Note: Federal statutes define full-time as a 30 hour work week. However, small employers still have the ability to set a minimum weekly work week requirement as low as a 24 hour work week and as high as a 40 hour work week. 6

9 b. Persons compensated on a 1099 basis are eligible for coverage. Eligibility requirements for groups with 1099 employees are as follows: No more than 50% of the group s employees may be 1099 employees employees are not eligible for vision or life benefits. The 1099 employees must be employed by the company full time and year round. All present and future 1099 employees are subject to the same eligibility requirements as taxed employees. The small group employer must contribute the same amount for 1099 employees as for all other employees. The employer must have at least two taxed employees, with tax documents that verify the company is a valid business. A complete list of all 1099 employees must be included with the new group submission. Anthem Blue Cross and Blue Shield may require the employer to submit documentation to demonstrate eligibility. The employer will need to submit a completed Eligibility Requirement Form for Groups Covering 1099 Employees. c. Temporary, seasonal and substitute employees are not eligible. d. If an owner believes the structure of his or her holdings produces a single employer-employee relationship, Anthem Blue Cross and Blue Shield will require copies of all associated supporting documentation validating 51% common ownership of all companies involved. The documentation may be submitted before case submission. Anthem Blue Cross and Blue Shield will make the final determination about whether there is one responsible employer. 3. Ineligible categories Associations, multiple employer trusts, part-time and seasonal employees, retirees, and board of director members and stockholders are not eligible. Definitions or explanations follow: a. Association (unless qualifying as a guaranteed association): A group of employer units banded together for any reason b. Multiple employer trust (unless qualifying as a guaranteed association): Employers, usually in the same or related industries, brought together by an insurer, agent, broker or administrator for the purpose of providing insurance for their employees under a master contract issued to a trustee under a trust agreement c. Part-time employee: An employee who works less than 30 hours per week d. Seasonal employee: An employee who regularly works less than 12 consecutive months but for periods of time that are definite in length and with a formal policy of recall e. Retirees: Retirees are eligible for Individual conversion or Medicare Supplement products f. Board of director members and stockholders are not eligible unless they are also officers/employees and working at least 24 hours per week 4. Contribution Health Employers may choose to contribute to an employee and/or an employee s dependents health premium cost. Employers have the following contribution options should they choose to contribute: a. Traditional option: A contribution percentage of each covered employee s and/or dependent s monthly health premium b. Fixed dollar option: Any fixed dollar amount each covered employee s and/or dependent s monthly health premium Vision a. If vision coverage is purchased alone, a minimum contribution of 50% of each covered employee s and/or dependent s monthly vision premium b. If vision coverage is purchased with health coverage, a minimum contribution of 25% of each covered employee s monthly vision premium 7

10 General underwriting guidelines for new business (cont.) Section 2 Life and Disability For basic life, a minimum contribution of 25% of each covered employee s monthly life premium 5. Employee eligibility To be eligible as an employee, a person must be an active employee on a full-time basis and with a regularly scheduled work week of at least 30 hours per week and be compensated for that work by the employer (subject to withholding as it appears on a W-2 form). Sole proprietors, partners and corporate officers must work at least 30 hours a week to be eligible (unless the small group has opted to lower the hourly requirement to a 24 hour work week). 6. Employee participation requirements Health The standard group participation requirement for Anthem Blue Cross and Blue Shield s plans, is a minimum of 70% of the eligible employees. The group must maintain the corresponding minimum participation levels to remain eligible (100% if non-contributory). Groups are subject to non-renewal if participation falls below the required minimum. If an employee waives coverage due to other group coverage through another employer (as a subscriber or a dependent), because the employee has an Individual policy, or because the employee has other qualifying creditable coverage, the employee may be considered ineligible for the purposes of calculating participation. The employer must submit a declination for these employees. If a husband and wife both work for the same employer, they may apply separately as employees, or one may be a dependent on the other s coverage. The children may apply as dependents of only one employee, not both. This applies to all lines of coverage. Class carve-outs such as management only or salary vs. non-salary may be considered with underwriting approval. A list of the job classifications the employer wants to insure will be required with the initial group submission. All employees must be accounted for, and those in the carved-out classification must be identified. These carve-out groups are subject to underwriting approval and may be declined if they do not meet Anthem Blue Cross and Blue Shield s underwriting criteria. 7. Health underwriting Anthem Blue Cross and Blue Shield will underwrite groups of 2-50 in accordance with Colorado laws and regulations. Employees in employer groups of 1-50 eligible enrolling employees must complete the current Colorado Uniform Employee Application. a. Eligible employees and/or dependents waiving coverage at the time of enrollment must complete a waiver of coverage, which includes their name, Social Security or ID number, and the applicable waiver section of the Employee Application, and they must forward it to Anthem Blue Cross and Blue Shield. Proof of coverage may be required. b. The underwriting department can usually make an immediate decision if it receives all the proper documentation with the initial group submission. Please refer to page 4 for all documentation required. Any missing documentation and/or premium will delay the underwriting process. c. Under normal circumstances, the underwriting department does not request an attending physician s records. However, additional medical information may be required. If underwriting requests medical records, the applicant is responsible for providing them at his or her own expense. A HIPAA-compliant authorization will be required. 8. Health coverage Employers may offer a single designated plan or a mix of plans along with dental, vision, life and disability coverage with the following exceptions: a. Groups with 1-3 enrolling employees must select a single plan option. b. Groups with 4+ enrolling employees may select a single plan or multiple plan options. 8

11 c. Groups with 4+ enrolling employees may offer all plan options (excludes any HRA plan). d. HRA plan options may only be offered as a single option, or as a dual option with a HSA plan for groups of 4+. The employer is responsible for their portion of all outstanding payment obligations for all claims submitted to Anthem Blue Cross and Blue Shield within 12 months after termination of the HRA agreement. The guided access plan options are only available in specific employer-based geographic areas. Eligible groups may offer a High Performance Guided plan or plans in conjunction with the following requirements: a. The employer s place of business must be with the designated counties. b. Employees who reside outside the designated counties may choose any other plan that is offered by the employer. 9. Vision coverage a. Vision coverage is available to groups of A minimum of two enrolled is required. Employers may select a single plan or a combination of plans to be offered. b. At least 75% of the eligible employees must participate when the employer offers stand-alone vision coverage. At least 50% participation is required if vision coverage is offered along with health coverage. The group must maintain the corresponding participation levels to remain eligible (100% if non-contributory). c. Pediatric vision coverage will be included in all ACA complaint medical plans. d. Voluntary vision will be available for groups that have 10 or more enrolling on the group s medical plan(s). 10. Pediatric Dental coverage a. Pediatric dental coverage is included in several medical plan options at no additional cost. b. Members that select a medical plan without an embedded pediatric dental benefit will be required to purchase a plan that meets the ACA requirements for the essential health benefit. 11. Life and Disability coverage a. Stand-alone basic life coverage and long term disability are available to groups of 2-50 with a minimum of two enrolling. b. Short term disability is available for groups of 2-50 but must be purchased with noncontributory basic life where all employees are enrolled in basic life. c. Optional Supplemental life is available for groups of 20+ and must be purchased with basic life. d. The participation requirements are: basic life and disability require 75% participation for contributory plans basic life and disability require 100% participation for non-contributory plans dependent life requires 50% of the employees with dependents to enroll when contributory and 100% participation from employees that have dependents when non-contributory. optional supplemental life requires 25% participation. e. Contribution requirements are: basic life, short term and long term disability require a minimum of 25% dependent life and Optional Supplemental life do not require a contribution. f. Groups must be in business for 12 months or more to be eligible for coverage. g. Groups or 10+ enrolling in life or disability may vary benefit by employee class. Limit of two classes. h. Guarantee Issue (GI) amounts are as follows: Basic Life groups of 2-9 enrolling, $30,000 groups of 10+ enrolling, $50,000 dependent life, all amounts are GI employees over the age of 70, $25,000 9

12 General underwriting guidelines for new business (cont.) Section 2 Short Term Disability groups of 2-5 enrolling, $500 groups of 6+ enrolling, all amounts are GI Long Term Disability groups of 2-5 enrolling, no GI 6+ enrolling, all amounts are GI i. New hires must complete the health history section of the applicable employee application if the amount chosen is more than the guaranteed issue amount. Life insurance above the guaranteed issue amount is subject to underwriting approval. j. Late enrollees must complete the health section of the applicable application. Late enrollees are medically underwritten regardless of the groups guaranteed issue amount. k. Existing health groups that request an increase to their life coverage amount are subject to underwriting approval, regardless of group size. Basic Life Coverage a. Flat Amount Benefits available are: 2-9 enrolling employees, $25,000, $30,000 or $50, enrolling employees, $25,000, $30,000, $50,000 or $100, enrolling employees, $25,000 to $300,000 in $1000 increments If benefits are varied by class, there cannot be more than 2.5 difference in benefit between classes. b. Salary Based Benefits available are: 2-9 enrolling employees - group can offer max benefit from $25,000 to $100,000 limited to 1X annual salary enrolling employees - group can offer max benefit from $25,000 to $250,000 with option of 1X or 2X annual salary 20+ enrolling employees - group can offer max benefit from $25,000 to $300,000 with option of 1X or 2X annual salary c. Rate structure for Basic life is age rating for groups of 2-9 and composite rating for groups of 10+. d. Accidental death and dismemberment coverage, waiver of premium, a living benefit, and conversion coverage are included. Benefits reduce by the following: 35% at age 65, 50% at age 70. Groups of 20+ may select a single age reduction of 50% at age 70. Coverage terminate at retirement. Optional Supplemental Life a. Optional Supplemental Life (formerly known as Supplemental life) can be offered to groups of 20+ enrolling and must be offered in addition to basic life. b. Coverage options are $15,000, $25,000, $50,000 or $100,000. The amount is selected by the employer but the benefit is 100% employee paid. The group may offer up to two classes. c. Regardless of group size, Optional Supplemental life is age rated. Dependent Life Coverage a. Dependent Life must be offered with Basic life. b. Coverage options are based on group size. All groups can offer $10K SP/$5K CH or $5K SP/2.5K CH C. Group of 20+ can also choose $2K SP/ $1K CH, $15K SP/ $7500 CH or $20K SP/$10K CH. d. Continuation of coverage rules for children up to age 26 are consistent with the health plan s continuation rules. Spouse coverage terminates when the spouse turns 65. The rate is a flat rate per family unit. Short Term Disability a. Plans available for groups of 2-19: 1/8/13, 1/8/26, 8/8/13, 8/8/26, 15/15/13 or 15/15/26 b. Plans available for groups of 20+ in addition to the above plans: 30/30/13 or 30/30/26. c. Benefit amounts available are Flat $250/week or 67% with a max $1,000 or $1,350 10

13 d. Covers non-occupational disabilities. Pregnancy is covered the same as any illness. There are no pre-existing condition limitations. e. Rates are per each $10 in benefits and are age rated for groups of 2-9 and composite rated for groups of 10+. Long Term Disability a. Plans available Gold: Age 65/RBD, 60% of $3,000 or $6,000, 90 or 180 day elimination period. Silver: 5-year/RBD, 60% of $3,000 or $6,000, 90 or 180 day elimination period. Bronze: 2-year/RBD 60% of $3,000 or $6,000, 180 elimination period. b. Rates are per each $100 of monthly covered payroll and are age rated for groups of 2-9 and composite rated for groups of 10+. c. Ineligible categories are: groups with 50% or more of insureds being members of the same family. groups with 50% or more of the insureds being age 50 or older. 12. P.O.P. (Premium Only Plan)* P.O.P. is available to any size group and is allowed under a special provision of Section 125 of the IRS tax code that addresses employer and employee tax relief. With a P.O.P., employers must adjust their payroll process and pay their employees portion of their group insurance premiums on a pre-tax basis. Wageworks* provides all the necessary information for a group to install and support a P.O.P. The annual fee for P.O.P. is $125. For groups enrolling with 10 or more on health and life coverage the first year annual fee is waived. A separate check for the P.O.P. fee made payable to Anthem Blue Cross and Blue Shield must be submitted along with the P.O.P. application. If a group applies for Anthem Blue Cross and Blue Shield health coverage concurrently with P.O.P., the group must submit the P.O.P. application and a separate check with all other required paperwork. Note: The P.O.P. enrollment cannot be processed until the underwriter has approved the group health coverage. Therefore, the P.O.P. effective date assigned by Wageworks may be later than the group s health coverage effective date. 13. Rating policies a. Anthem Blue Cross and Blue Shield may change health rates and benefits with 31-day advance written notice, or when the change is mandated by law, without notice. b. Changes to the rates are limited as defined by Colorado Law. c. All rates are based on actual enrollment. d. Non-grandfathered groups that experience a change in age affecting an employee s premium will see the premium change occur at the group s renewal date. e. Current grandfathered groups that experience age changes that affect an employee s premium will see the premium change occur 1st of the month following the employee s date of birth (unless the date of birth is the 1st day of the month.) f. Non-grandfathered plans will have a tobacco load of 10% applied to any member 21 years or older who uses tobacco. f. Grandfathered plans will have a tobacco load of up to 15% applied to any employee and/or spouse who uses tobacco. Rate assessment is based on age. g. A surcharge of up to 35% above the modified community rate may be imposed for up to a 12 month period if the small employer has at any time during the past 12 months, purchased health benefit coverage as a small employer that is either self-funded or insured through a health benefit plan that is not a small group plan (such as PEO). h. A surcharge of up to 35% above the modified community rate may be imposed for up to a 12 month period if a small employer has had their group insurance discontinued due to nonpayment of premiums and then reapplies for coverage in the small group market. * P.O.P. administration services are offered through an arrangement with Ceridian, an independent company not affiliated with Anthem Blue Cross and Blue Shield, or its parent company. 11

14 General underwriting guidelines for new business (cont.) Section Rate and benefit guarantee a. Health coverage rates are guaranteed for a maximum of 12 months. b. Rates for vision and life coverage are guaranteed for 12 months. c. Rates for vision or life coverage written in conjunction with health coverage will receive the health rate guarantee period. 15. New group eligibility/effective date a. The eligibility date for existing employees and dependents is the employer s effective date, unless new hires have not yet satisfied their employer s imposed waiting period. The effective date for these employees will be the first of the month following completion of the Employee Enrollment Application/Change Form for small groups of b. The employer may waive the waiting period for all new hires at the initial group enrollment. c. Small employer groups of 2-50 are not guaranteed an effective date. d. The small group underwriter will determine the group s acceptance, final rates and effective date. 16. Waiting period For future employees, employers may designate their waiting period as the first of the month following the employee s hire date, first of the month following one month, or first of the month following two months. A future employee s coverage eligibility date is always the first day of the month following completion of the waiting period. Anthem Blue Cross and Blue Shield will not waive the waiting period for any future employees. 17. Takeover provisions (CRS ) Small group takeover provisions comply with the following: Any carrier providing replacement coverage with respect to hospital, medical or surgical expense or service benefits within a period of 31 days from the date of discontinuance of a prior contract or policy providing such hospital, medical or surgical expense or service benefits shall immediately cover all employees and dependents who were validly covered under the previous contract or policy providing such hospital, medical or surgical expense or service benefits at the date of discontinuance and are within the definitions of eligibility under the succeeding carrier s contract and who would otherwise be eligible for coverage under the succeeding carrier s contract, regardless of any provisions of the contract relating to active full-time employment or hospital confinement or pregnancy. However, with respect to employees or dependents who are totally disabled on the date of discontinuance of the prior carrier s contract or policy and entitled to an extension of benefits pursuant to subdivision 2 of Section (4), or pursuant to subdivision (b) of Section of the Insurance Code, the succeeding carrier is not required to provide benefits for services or expenses directly related to any conditions that caused the total disability, except to the extent it may apply any applicable pre-existing conditions limitation (giving credit for prior coverage as required by law). 18. Prior deductible and annual out-of-pocket maximum credit a. For new group submissions, Anthem Blue Cross and Blue Shield provides credit for deductibles met under prior group health if proof of the actual dollar amount is submitted with the first claim. b. Credit for pharmacy deductibles is not available. c. Credit for annual out-of-pocket maximums are not available. 12

15 19. Eligible dependents Dependent coverage is available to the following: a. Lawful spouse b. Domestic partner c. Natural child d. Newborn child e. Legally adopted child f. Stepchild g. Ward of legal guardian h. Other such classifications as required by law or regulation See Section 5, Definitions, for specific age criteria. 20. Federal regulations a. Federal TEFRA, DEFRA and COBRA legislation regulates employee health care coverage. Based on this legislation and Anthem Blue Cross and Blue Shield s agreement with the employer, if a business employs, on average, fewer than 20 employees in a year, should any employee become 65 years of age, his or her primary health carrier will be Medicare. For employees who are 65 years old and who choose to retain their Anthem Blue Cross and Blue Shield small group coverage, Anthem will apply contract benefits as a secondary carrier for Medicare benefits paid or payable. b. If a member is covered by both Medicare and Anthem Blue Cross and Blue Shield and Anthem is secondary to Medicare, the Medicare payment is calculated first, and Anthem coordinates up to 100% of coverage for deductibles and coinsurance, not to exceed the Anthem benefit Special coordination of benefits (COB) rules may apply, specifically for Medicare secondary payor situations. The group s certificate contains additional details about COB rules. c. Anthem Blue Cross and Blue Shield is secondary to Medicare when the following criteria are met: The employer has fewer than 20 employees, and the member is age 65, or The employer has fewer than 20 employees and the member under age 65 is eligible for Medicare due to a disability, or The member enrolled following the first 30 months of kidney dialysis treatments for end-stage renal disease. d. COBRA: Participation in the employer s benefit plan, as well as coverage under whatever medical programs are provided by the employer to employees and their dependents, may be continued under a federal law known as COBRA for groups that employed 20 or more employees for at least 50% of the previous calendar year. The employer is responsible for administration, within the guidelines established by the federal government for compliance by employer groups. 21. State regulations Colorado State Continuation (CRS ) was effective January 1, This legislation provides for continuation of coverage for employees and eligible dependents of qualifying groups (i.e., groups that on at least 50% of the working days during the previous calendar quarter employed 1-19 eligible employees). Employees must have been continuously covered under the employer s plan for six consecutive months. Group conversion is available if the employee was covered for less than six months but more than three months. The employer must send written notice of State Continuation election, which must include, among other things, the amount of monthly premium due, to employees within 10 days of termination. Within 30 days of the termination date, the employee must 1) notify the employer in writing of the employee s intent to elect State Continuation coverage and 2) remit the appropriate premium amount to the employer. 13

16 General underwriting guidelines for new business (cont.) Section 2 An employee and/or the employee s eligible dependents are eligible for State Continuation coverage for up to 18 months if coverage was terminated due to any of the qualifying events below: a. The employee dies (continuation for dependents) b. The employee s employment is terminated or the employee s hours are reduced to the extent that loss of coverage results c. The employee s spouse divorces or legally separates from the employee Anthem Blue Cross and Blue Shield does not administer State Continuation coverage. 14

17 22. Colorado business structure underwriting requirements Documentation Suggestions for Each Business Type* Business type In business more than 3 months In business less than 3 months C Corporation S Corporation Partnership Limited Liability Company (LLC) Sole Proprietorship Independent Contractor UITR or Form 1120 U.S. Corporate Income Tax Return UITR or K-1 for shareholder s income K-1 for partner s income or Schedule SE (self employment tax) or Form 1065 Partnership Return and UITR for employees May file as either a C Corporation or Partnership (refer to above) Schedule SE and Schedule C filed with Form 1040 (tax return) and UITR for salaried employees Form 1096 and 1099 for each contractor and signed 1099 disclosure Payroll records and Articles of Incorporation or Form SS-4 (application for tax ID) Payroll records and Articles of Incorporation or Form SS-4 (application for tax ID) Partnership Agreement and SS-4 (application for tax ID) and payroll records May file as either a C Corporation or Partnership (refer to above) Payroll records and SS-4 or appropriate tax ID verification. A sole proprietor may use a Social Security number in lieu of obtaining a new tax ID. Form 1096 and 1099 for each contractor and signed 1099 disclosure Farm Form 1040 and Schedule F or K-1 Farms may also file Form 1041, 1065 or 1065B. Payroll records and SS-4 or Articles of Incorporation, Partnership Agreement, etc. Non-profit Organization Form 940 or Form 990 Articles of Organization and IRS confirmation of non-profit status * Submission of documentation listed above does not supercede the small group eligibility requirements reflected on page 6. 15

18 General underwriting guidelines for existing business Section 3 1. Open enrollment An employee and/or qualified dependent who previously declined coverage and later wants to enroll may apply at open enrollment. Special enrollment periods may apply. See Section 5, Definitions, Special Enrollment Period. 2. Contract benefit modifications Group level Employer plan change requests may be submitted only at the group s anniversary date. Required documentation must be complete and accurate to process the request. Anthem Blue Cross and Blue Shield must receive the completed documentation, including all necessary Anthem forms before the requested effective date. If Anthem accepts the application for benefit modification, the underwriting department will assign the effective date for the benefit change. Please also refer to the Plan Modification Job Aid on the next page to determine when the employer may request each type of benefit modification and to determine what documents must accompany the request. f. Anthem Blue Cross and Blue Shield product or portfolio changes do not constitute a new rate and guarantee period. g. Underwriting may be required for groups requesting to move to another medical portfolio. Plans may not be offered in more than one portfolio. Subscriber level Covered subscribers may move to a different plan offered by their employer on the anniversary of the group or at the time Anthem Blue Cross and Blue Shield approves a group-level benefit change. A subscriber requesting a change in health care benefits must submit the appropriate application/ change form for small groups of 1-50, if the employer is offering the plan requested. The following additional criteria apply to group-level contract benefit modifications: a. Increases in life benefits are subject to underwriting approval. b. Vision, or life and disability coverage added to an existing health policy will default to the health rate guarantee after the initial vision or life rate guarantee expires. c. The underwriter must receive the completed paperwork from groups requesting a benefit modification before the requested effective date. d. Subject to underwriting approval, existing groups may only change their contribution method six months after the original effective date and once in a 12-month period. e. Anthem Blue Cross and Blue Shield must be notified of changes in ownership or tax ID. These changes are subject to underwriting review. 16

19 3. Plan modification job aid For current Anthem Blue Cross and Blue Shield applications and forms, go to anthem.com. Benefit Modification When Eligible Documents Necessary Note: All changes may be subject to underwriting approval. Add health benefits* Increasing number of plans offered under existing Anthem Blue Cross and Blue Shield health or vision coverage** Request a change in health benefits that requires underwriting Add life or vision insurance Medical underwriting will apply for life amounts over guaranteed issue Increase existing life or disability coverage Existing groups will be subject to full medical underwriting regardless of group size or guaranteed issue volume Change in ownership* Underwriting will determine if group can maintain current contract or will need to apply as a new group. Change in contribution option** Change in waiting period First of the month following receipt of new group submission On anniversary date On anniversary date First of the month following receipt of all documentation If the group s prior ancillary coverage was dropped, the group may only add again at renewal. First of the month following receipt of all documentation First of the month following receipt of all documentation Six months after original effective date, once in a 12-month period Six months after original effective date, once in a 12-month period Note: Will only impact employees hired after the effective date of change Refer to the New Group Checklist on the last page of the Employer Application Health Plan Renewal Change Form or Vision Renewal Change Form provided in the group renewal packet 1. Letter from group (In some circumstances, a Colorado Uniform Employee Application or an Employee Enrollment Supplemental Application may be required.) 1. Employer Application 2. Letter from group 3. New applications for all applicants. 4. UITR reconciled 1. Employer Application 2. Letter from group 3. New application for all applicants 4. UITR reconciled 1. Letter from group 2. Legal documentation to support buyout, sale of assets, or acquisition 1. Letter from group 1. Letter from group * Must be submitted as a new group **Changes may impact the group s grandfathered status. 17

20 General underwriting guidelines for existing business (cont.) Section 3 4. Group add effective dates a. Eligible employees may apply for coverage for themselves and their eligible dependents by submitting a completed Colorado Uniform Employee Application for Small Group Health Plans for small groups of Effective dates are determined as follows: Anthem Blue Cross and Blue Shield must receive the application within 31 days after the date of hire or within 31 days of the expiration of the waiting period selected by the employer. If Anthem receives the application before the employee s waiting period is completed, the effective date coincides with the eligibility date. If Anthem receives the application more than 31 days after the employee s eligibility date, the applicant is considered a late entrant and appropriate pre-existing condition limitations and exclusions may apply. Employee must wait until open enrollment. Any time an employee and/or dependent becomes eligible, but chooses not to enroll in a medical plan, or if an employee and/ or dependent remains eligible, but is not retaining medical coverage, a declination must be submitted on the Colorado Uniform Employee Application (Employee and Dependent Information and the Employee/ Dependent Waiver of Coverage) Section. If any ancillary product is also declined, the Employee Enrollment Supplement Form will need to be submitted with Sections 2 and 3 completed. b. Special enrollment periods are available for newborn children, adopted children, new spouses and wards of legal guardians. They may be added without a waiting period if they are enrolled within 31 days of becoming eligible. In addition, spouses who are eligible but not enrolled may also be added in the event of the birth or adoption of a child. An employee who is eligible but not enrolled may enroll at the time of marriage, birth, adoption or placement for adoption, which are qualifying events. 18

21 5. Life insurance conversion When an active employee loses group life coverage due to employment termination or retirement, the employee may have the right to convert from group term life insurance to an individual whole life insurance policy without evidence of insurability. The employee must apply in writing to Anthem Life for conversion, or complete a Notice of Conversion Form and pay the initial premium on the policy within 31 days after the group term life insurance ends. The employee may choose to be insured for the same or a lesser amount of the insured amount under the group plan. The conversion plan will be effective on the date group term life insurance ends, if the employee applies and pays the conversion premium within the required 31 days. Conversion is also available when an employee loses coverage because the group plan terminates or changes. In these cases, the following additional limitations apply: The amount available for conversion is limited to the lesser of $2,000 or the difference between the group life amount Anthem Life provided and any new group coverage that becomes available during the conversion period. The employee must have been covered under the group life policy for at least five years. 19

22 Anthem Connect (Dental) Section 4 1. Enrollment Starting February 1, 2013, we now offer new groups the new Prime and Complete dental plans through our dental company Anthem Connect. These documents are needed for new group submissions: a. Small-group master dental contract application Fill out all sections that are needed. Broker must fill out the Producer of Record section and sign the form. Signature box must be signed. b. Dental membership enrollment form or approved enrollment spreadsheet Fill out all sections (instructions on back of form). Employee must sign and date the form. Group representative must sign and date the form. Note: Anthem Connect will also accept an approved enrollment spreadsheet filled out by the group administrator in place of the membership enrollment form. The spreadsheet contains instructions on how to complete each field. a. Corresponding dental proposal (rates). b. Include or attach a copy of the current dentalcarrier billing statement. c. Include or attach a copy of the dental summaryplan description or certificate. d. Include or attach a copy of the medical plan billing if the group wants to elect the Medlock feature. Billing must show enrollment levels by employee. e. The Dental Prime and Complete sold-case checklist is optional. It helps the group/broker make sure everything is included in the submission. You can fax, , or mail the documents to Anthem Connect. See the contact information below. Call Anthem Connect (with questions): completed forms to: Fax completed forms to: Send completed forms to: (regular mailing address) Connect@AnthemDentalAdmin.com Anthem Blue Cross and Blue Shield Attn: Dental Enrollment Department P. O. Box 1193 Minneapolis, MN Send completed forms to: MN Dental Install Team (overnight mailing address) Attn: Anthem Connect 730 South Broadway Gilbert, MN Participation requirements Employer-paid dental plans for groups 2 to 50: a. Classic, Value and Enhanced Groups with two to four employees require 100% participation. For groups with five or more eligible employees, a minimum of two employees must enroll, with a minimum of 60% of the net eligible employees. b. A minimum of 15 eligible employees must be enrolled to select a dual option. At least five employees must be enrolled in each option. Voluntary dental plans for groups 5 to 50: a. A minimum of five employees must enroll in the stand-alone dental products. No further participation is needed. b. A minimum of 15 eligible employees must be enrolled to select a dual option. At least five employees must be enrolled in each option. No binder check is needed. The group will be billed a two-month premium on the first bill. 20

23 3. Underwriting guidelines Employer-paid dental plans for groups 2 to 50 and voluntary dental plans for groups 5 to 50: a. Group must be headquartered in Colorado. b. Employee-only plans are available for groups of two or more and for five or more (voluntary). c. If coverage is waived, a qualifying event must occur to get coverage, or the employee must wait until open enrollment to get coverage. d. Groups with 50% or more of eligible employees residing outside the state are subject to underwriting review. e. Coordination of benefits applies. f. Only full-time employees are eligible for the dental plan. Full-time is defined as 30 hours per week. Any changes to the definition of an employee must have underwriting approval. g. Seasonal or temporary employees aren t eligible. h. Dental offices and clinics aren t eligible. i. No UITR is required to verify wages. j. Anthem Connect will NOT accept the CO Uniform application in place of the Dental membership enrollment form. 4. Medlock feature (Medical Lock) a. Enrollment in the dental plan requires the employee to be enrolled in the employer (Anthem) medical plan. Medical enrollment requirements still apply to medical plan enrollment. b. Enrollment elections for medical and dental must be the same. For example, an employee with single coverage on medical must have single coverage on dental. An employee with family medical coverage must have family dental coverage. c. A copy of the medical plan billing showing enrollment levels by employee must be submitted with the master application and enrollment forms. 5. Prior coverage discounts Groups may be eligible for discounts based on their prior dental coverage. To qualify for these discounts the group: a. Must have a comparable dental plan in place for at least 12 consecutive months, with no lapse in coverage, immediately prior to their Anthem effective date. b. The current carrier plan must provide coverage equivalent to the coverage offered by Anthem. c. The current dental carrier billing and dental summary plan description or certificate must be submitted with the master application and enrollment forms. 6. Optional orthodontic coverage Employer paid dental plans for groups 2 to 50: a. Orthodontic coverage is available for groups of five or more enrolled in the Classic and Enhanced programs. b. No orthodontic waiting periods for new groups or new hires. c. Coverage options are for child-only orthodontic coverage for dependents age 8 through 18 or adult and child orthodontic coverage from age 8. Voluntary dental plans for groups 5 to 50: a. Orthodontic coverage is available for groups of five or more enrolled. b. Must have a comparable orthodontic coverage in place for at least 12 consecutive months, with no lapse in coverage, immediately prior to their Anthem effective date. The current dental carrier summary plan description or certificate must be submitted with the master application. c. Coverage optional for child-only orthodontic coverage for dependents age 8 through Maximum carry-over provisions a. Available on the Classic and Enhanced plan. b. Available on the Voluntary plan. c. Not available on the Value plan. 21