BAP UNDERWRITING GUIDELINES

Transcription

1 The Benefit Avantage Program allows for more flexbility when quoting. Like everything else, there are certain guidelines that are are required to follow and anything except the guidelines must be approved by Group Underwriting. UNDERWRITING GUIDELINES 2 10 LIVES General Guidelines (Benefit Advantage Program) 1. Maximum percentage of Employees who: a) are hired in the last 12 months (PROVIDE REASON) 40% b) are on commission 40% c) earn less than $10, annually 40% 2. Earnings for commissioned Employees will be the average earnings over a three year period paid by the Employer, exclusive of bonuses or overtime earnings. If employed less than three years, earnings will be averaged over the available length of service with the Employer. 3. Businesses should have been operating for a minimum of two years. 4. Disabled employees must be listed. 5. ALWAYS obtain a copy of the collective agreement for union plans. 6. When quoting a non-government group with government funding, the group must meet the following requirements: 1) Maximum funding of 50% from ALL government sources, and 2) In operation for a minimum of two years, and 3) Must have previously been insured by another carrier, and 4) The stability of the group is a major factor. 7. An Employee must work a minimum of 25 hours per week to be eligible for coverage. Participation Requirements Non-conbtributory and contributory plans must have 100% participation. Participation requirements apply to the group at inception, and any new employees after that date are required to join the plan as a condition of employment. 8. Elected officials must be approved by underwriting

2 EMPLOYEES client must not have a Co-operators Group Policy currently in force. Groups who are multi-line or have a commercial policy are eligible for a 2% discount in premium rates. Should they become a commerical or multi-line client after purchasing the group product the rates will be reduced by 2% effective the first of the following month. The agent will be responsible to notify Group Lockhart of their change with confirmation of the other policy number in writing. 10. This program must exclude existing Co-ops and Credit Union business, Home Hardward or any other existing Group Business with The Co-operators. 11. Health evidence is a requirement on all benefits. The applicant is to complete a short medical evidence form. Group Lockhart will provide clear case underwriting on all groups. Any evidence form indicating yes answer will be sent to The Co-operators to underwrite (for details see attached clear case underwriting). 12. Home based incorporated businesses are eligible for coverage. The Long Term Disability benefit is limited to 2 year benefit. Note: It is possible that home based business is not incorporated nor do they have a commercial policy. In this case the following conditions must be met: * The individual must be of skilled or professional trade. * The requirement of permanent employment must be met. The employment must be of permanent nature. The person must not be doing an odd job, while he/she is tryiong to find their real job. Must have at least 2 years of history or stable contract work. * The requirement of regular salary must be met. When disabled, we must be definite if there is a loss of income and what amonts of benefit must be paid. To determine insurable income, it must be clear that the individual is drawing regular salary from his business. Some individuals draw dividends. Dividends are not insurable income, as individual can still draw dividiends while disabled. Monthly income for these type of people can fluctuate significantly as it will depend on whether they have a contract or not. Insurable income should be determined by obtaining average of 2 years of income tax notice of assessment. * The individual must be reporting income to Revenue Canada. * Contract or employment must not be of seasonal nature. 13. A vision care option of $200 is available upon request, however, premium rates will be increased accordingly. Once this option is chosen the lessor amount is not available in the future. (minimum of 4 lives)

3 14. Please indicate by individual if they are covered under WCB on the request to quote and on the application form. Farm Corporations Must be an incorporated farm operation. Operation 12 month a year. No seasonal employees. Only full time year round employees are eligible. Must have 100% participation of eligible employees. (Employees with spouses that have EHC and/or dental coverage may opt out.) There must be at least five insured s for each coverage. If the case has greater than 10 lives SR4 s should contact their Group Rep s office for an EMPAC quote. All preceding guidelines also apply. Final decision on a Farm Coporation will be on a case by case basis

4 PLAN DESIGN OPTIONS - 2 TO 10 LIVES Health evidence is required on all amounts of insurance. LIFE and ACCIDENTAL DEATH, DISEASE AND DISMEMBERMENT Option 1 Flat $25,000 Option 2 1 x annual salary to a maximum of $300,000 Option 3 2 x annual salary to a maximum of $300,000 All Options Reduce by 50% at age 65, maximum $20,000 Terminates earlier of retirement or employee's age 70 DEPENDENT LIFE - coverage from birth - includes Pre-natal Benefit Option 1 Spouse $10,000 Option 2 Spouse $5,000 Child $5,000 Child $2,500 All Options No spousal conversion Terminates earlier of retirement or employee's age 70 LONG TERM DISABILITY Option 1 Option 2 Option 3 Elimination Period 119 days 30 days 119 days 30 days 119 days 30 days Benefit Period 2 years To age 65 5 years Def. of Disability 2 year own occ. 2 year own occ. 2 year own occ. Integration Primary Primary Primary Maximum $3,500 $3,500 $3,500 % of Salary 66.67% 66.67% 66.67% Termination Age 65 Age 65 Age

5 EXTENDED HEALTH CARE Option 1 Option 2** Option 3 Option 4** Co-insurance Drugs/Other 100%/100% 80%/80% 100%/100% 80%/80% Deductible * Single/Family $0/$0 $0/$0 $25/$50 $25/$50 * Semi-private and Convalescent Hospital, Vision Care and Out-of-Country are not subject to coinsurance or deductibles. ** If no coverage currently exists, group is limited to Option 2 or 4 for the first 12 months DRUG CARD - Available under options 1 and 2 only Option 1 $0.00 co-pay (Plan Z) Option 2 20% co-pay (Plan Z) All Options Hospital Semi-private Vision Care $100/24 months Survivor 2 years ParaMed $500/yr Convalescent Hospital Daily limit $20 for a maximum period of 90 days. Nursing Care $5,000/year Hearing Aids $400/60 months Drugs Prescription Maximum In Canada Unlimited/year Outside Canada $1,000,000/lifetime Out of Province Emergency travel coverage up to 90 days Termination Earlier of retirement or employee's age

6 DENTAL Option 1 Option 2** Option 3 Option 4** Co-insurance Level 1 and 2 100%/100% 80%/80% 100%/100% 80%/80% Deductible * Level 1 and 2 Single/Family $0/$0 $0/$0 $25/$50 $25/$50 All Options Maximum Combined maximum of $1,000 per person Fee Guide Current Survivor 2 year Termination Earlier of retirement or employee's age 70 * Semi-private and Convalescent Hospital, Vision Care and Out-of-Country are not subject to co-insurance or deductibles. ** If no coverage currently exists group is limited to Option 2 or 4 for the first 12 months COVERAGE PREREQUISITE 2-10 lives A group must purchase Life, Accidental Death & Dismemberment, Dependent Life and Long Term Disability before purchasing Extended Health Care and/or Dental

7 UNDERWRITING GUIDELINES - ONE LIFE NOTE: All the rates will be 15% higher with the exceptioin of LTD which will be 25% higher than the base rates for the BAP program for 2-10 lives. General Guidelines (Benefit Advantage Program) 1. Earnings for commissioned Employees will be the average earnings over a three year period paid by the Employer, exclusive of bonuses or overtime earnings. If employed less than three years, earnings will be averaged over the available length of service with the Employer. 2. Businesses should have been operating for a minimum of two years. 3. Disabled employees must be listed. 4. ALWAYS obtain a copy of the collective agreement for union plans. 5. When quoting a non-government group with government funding, the group must meet the following requirements: 1) Maximum funding of 50% from ALL government sources, and 2) In operation for a minimum of two years, and 3) Must have previously been insured by another carrier, and 4) The stability of the group is a major factor. 6. An Employee must work a minimum of 25 hours per week to be eligible for coverage. Participation Requirements Non-conbtributory and contributory plans must have 100% participation. Participation requirements apply to the group at inception, and any new employees after that date are required to join the plan as a condition of employment. 7. Elected officials must be approved by underwriting

8 8. Client must not have a Co-operators group policy currently in effect. A client who is a multi-line or has a commercial policy are eligible for a 2% discount in premium rates. Should they become a commerical or multi-line client after purchasing the group product the rates will be reduced by 2% effective the first of the following month. The agent will be responsible to notify Group Lockhart of this change with confirmation of the other policy number in writing. 9. This program must exclude existing Co-ops and Credit Union business, Home Hardward or any other existing Group Business with The Co-operators. 10. Health evidence is a requirement on all benefits. The applicant is to complete a short medical evidence form. Group Lockhart will provide clear case underwriting on all groups. Any evidence form indicating yes answer will be sent to The Co-operators to underwrite (for details see attached clear case underwriting). 11. Home based incorporated businesses are eligible for coverage. The Long Term Disability benefit is limited to 2 year benefit. Note: It is possible that home based business is not incorporated nor do they have a commercial policy. In this case the following conditions must be met: * The individual must be of skilled or professional trade. * The requirement of permanent employment must be met. The employment must be of permanent nature. The person must not be doing an odd job, while he/she is tryiong to find their real job. Must have at least 2 years of history or stable contract work. * The requirement of regular salary must be met. When disabled, we must be definite if there is a loss of income and what amonts of benefit must be paid. To determine insurable income, it must be clear that the individual is drawing regular salary from his business. Some individuals draw dividends. Dividends are not insurable income, as individual can still draw dividends while disabled. In cases of income splitting the spouse s salary will not be covered unless they are a full time employe actively at work. Monthly income for these type of people can fluctuate significantly as it will depend on whether they have a contract or not. Insurable income should be determined by obtaining average of 2 years of income tax notice of assessment. * The individual must be reporting income to Revenue Canada. * Contract or employment must not be of seasonal nature. * Please indicate by individual if they are covered under WCB on the request to quote and on the application form

9 PLAN DESIGN OPTIONS - ONE LIFE Health evidence is required on all amounts of insurance. LIFE and ACCIDENTAL DEATH, DISEASE AND DISMEMBERMENT Option 1 Flat $25,000 Option 2 Flat $50,000 All Options Reduce by 50% at age 65, maximum $20,000 Terminates earlier of retirement or employee's age 70 DEPENDENT LIFE - from birth Option 1 Spouse $10,000 Option 2 Spouse $5,000 Child $5,000 Child $2,500 All Options No spousal conversion Terminates earlier of retirement or employee's age 70 LONG TERM DISABILITY Option 1 Option 2 Option 3 Elimination Period 119 days 30 days 119 days 30 days 119 days 30 days Benefit Period 2 years benefit period To age 65 5 years benefit period Def. of Disability 2 year own occ. 2 year own occ. 2 year own occ. Integration Primary Primary Primary Maximum $2,000 $2,000 $2,000 % of Salary 66.67% 66.67% 66.67% Termination Age 65 Age 65 Age

10 EXTENDED HEALTH CARE Option 1 Option 2** Option 3 Option 4** Co-insurance Drugs/Other 100%/100% 80%/80% 100%/100% 80%/80% Deductible * Single/Family $0/$0 $0/$0 $25/$50 $25/$50 * Semi-private and Convalescent Hospital, Vision Care and Out-of-Country are not subject to coinsurance or deductibles. ** If no coverage currently exists, group is limited to Option 2 or 4 for the first 12 months DRUG CARD OPTION NOT AVAILABLE. All Options Hospital Semi-private Vision Care $100/24 months Survivor 2 years ParaMed $500/yr Convalescent Hospital Daily limit $20 for a maximum period of 90 days. Nursing Care $5,000/year Hearing Aids $400/60 months Drugs Prescription Maximum In Canada Unlimited/year Outside Canada $1,000,000/lifetime Out of Province Emergency travel coverage up to 90 days Termination Earlier of retirement or employee's age

11 DENTAL Option 1 Option 2** Option 3 Option 4** Co-insurance Level 1 and 2 100%/100% 80%/80% 100%/100% 80%/80% Deductible * Level 1 and 2 Single/Family $0/$0 $0/$0 $25/$50 $25/$50 All Options Maximum Combined maximum of $1,000 per person First 12 months of coverage are limited to $500 per person Fee Guide Current Survivor 2 year Termination Earlier of retirement or employee's age 70 * Semi-private and Convalescent Hospital, Vision Care and Out-of-Country are not subject to co-insurance or deductibles. ** If no coverage currently exists group is limited to Option 2 or 4 for the first 12 months COVERAGE PREREQUISITE A group must purchase Life, Accidental Death & Dismemberment, Dependent Life and Long Term Disability before purchasing Extended Health Care and/or Dental

12 ANSWERS TO FREQUENTLY ASKED QUESTIONS Q: How does the writing Agent get paid? A: Co-operators Life will be responsible for distributing the Agent commissions. Commissions of 7% of premium will be credited as follows: The annual premium will be estimated by multiplying the monthly premium by 11. This amount, along with the AP credits will be credited up front immediately to the Agent. (i.e. 7% of 11 months premium) Any commission outstanding at the end of the 11th month will be adjusted according to the actual premium received for that year. The second year commission will be calculated based on the latest monthly premium received. This monthly premium will be multiplied by the number of months remaining in the calendar year (i.e. to December 31st), less one month. This amount will be credited up front. Any commission outstanding at the end of the calendar year will be adjusted according to the actual premium received for that period. The third year commission and each year thereafter will be for the period January 1 to December 31 and will be calculated based on the latest monthly premium received. The annual premium will be estimated by multiplying the latest monthly premium by 11. This amount will be credited up front. Any commission outstanding at the end of the year will be adjusted according to the actual premium received for that year. This is a rather complicated answer to a simple question but allows an annualized commission to be paid up front on new cases and a move to our common renewal date of January 1 for the Benefit Advantage Block of business. Consequently, it will generate large advances on your renewal portfolio of Benefit Advantage clients in January each year. Q: What are the minimum benefit options? A: The core package of mandatory benefits is Life, AD&D and Long Term Disability. Dependent Life is not mandatory as a group may require all single coverages. Health and Dental benefits are optional. Groups may add either Health or Dental or both

13 Q: If one person is declined for coverage does the 100% participation rule still apply? A: If the group had 4 people, for example, we could place coverage on the other three employees provided there is no existing group coverage. If all four were insured with an existing plan, The Co-operators would decline the whole case if one person were uninsurable. Employees must not lose coverage when changing group insurers. Q: What if the case is not a commercial client of The Co-operators? A: Eligibility for the Benefit Advantage Program is restricted to commercial clients or multi-line clients of The Co-operators. We can proceed with issuing group coverage if a commercial quote has been provided and we have a letter from the client stating that commercial business will be placed with The Co-operators at the upcoming renewal date. Q: Can employees elect different coverage options within the same group? A: Different benefit schedules can be established for each eligible class of employees such as management, salaried and hourly employees. 100% of each eligible class must participate in the selected benefits for that class unless they are waiving Health and Dental benefits due to spousal coverage through another employer. It is possible to insure two owners as management and not have employee classes eligible. All employees in a class must take the core benefits. Q: Whom should premium payment be made to? A: Cheques should be made payable to Group Lockhart. Q: What rates are to be used if there are employees in more than one province? A: The rates for each employee should reflect the province in which they reside