UNDERWRITING GUIDELINES

Transcription

1 UNDERWRITING GUIDELINES Groups with employees selecting Transitional Relief Anthem Blue Cross and Blue Shield And Its Affiliate HealthKeepers, Inc. For Renewals Effective January 1, October 1, 2016 For Broker, Sales and Internal Staff use only

2 Changes are in italics on the indicated pages: HMO has been replaced by either HealthKeepers (when referring to the company or service area) or POS (if referring to product). Those changes are not italicized. Page 9: adds foster child as an example of an eligible dependent Page 13: Changes to the Group Imposed Waiting Period to be effective the first of the month following the date received at Anthem. (July) Group Imposed Waiting Period for Rehires changed to 13 weeks beginning with date of termination/effective date of cancellation (July) Page 14: clarifies that voluntary loss of coverage is not a qualifying event Pages 15 and 16: changes references from cafeteria plans to Section 125 plan Page 18: changes from group size to employer size Page 19: adds Underwriting may re-rate a group if enrollment changes by 10% or more Page 20: adds new section on Transitional Relief 2

3 Table of Contents Section I. Group Health Care Coverage Types of Organizations Eligible for Coverage...5 Location of Group...5 Types of Organizations Ineligible for Coverage...5 Common Control...6 Renewal Date...6 Multi-Option...7 Optional Riders 7 Sole Carrier...7 Section II. Requirements for Group Membership Eligible Employees...8 Ineligible Employees...8 Eligible Dependents...9 Ineligible Dependents...9 Retirees...9 Early Retirees...9 Professional Employment Organizations...10 Classes of Employees...11 Types of Coverage Available...11 Medicare Supplement...12 Effective Date of Coverage...12 Termination of Group Membership...12 Group-Imposed Waiting Period...13 Late Entrants...13 Open Enrollment Period.14 Special Enrollment Periods Other Enrollment Periods...15 Section III. Changes to the Group Benefit Changes Mid-year Election Changes to Sec. 125 Plans Area Changes Business Reorganizations Mergers Consolidations.17 New Owner..18 Buying Assets of Existing Group Group Name Changes New Business Entity with Same Employees Transfers between Lines of Business Splitting Groups Combining Groups Manipulation of Segments Changes in Agent of Record or Commission Payment...19 Changes in Enrollment...19 Changes in Covered Dependents

4 Section IV. Termination of Group Coverage Non-Payment of Premium Employer Goes Out of Business Employer Requests Termination Section V. Transitional Relief...20 Section VI. Associations Enrolling in an Association

5 Section I. Group Health Care Coverage Types of Organizations Eligible for Coverage Eligible groups are generally defined as: Organizations engaged in trade or business Religious institutions Charitable or non-profit institutions Educational institutions Governmental agencies and subdivisions The organization must be a legal entity established for a strong, mutual, and continuing interest other than for insurance purposes. In addition, the business must maintain a bona fide employer-employee relationship with all persons insured under the group's health care program. Each group must have a designated individual with contract signing authority and decision making authority for health care coverage who normally works at the group's location within Anthem Blue Cross and Blue Shield's service area. Location of Group The group must be physically located and headquartered within the service area of Anthem. Anthem's service area is defined as the State of Virginia with the exception of the area east of State Route 123 in Northern Virginia, the city of Fairfax and the town of Vienna. There is one exception. Groups headquartered out of area but with a separate branch office located within Anthem's service area may be considered separately. These groups can receive a quote for the inarea branch if decision making authority is delegated to an employee working in that branch. Enrollment in these cases is limited to the employees working in the in-area office. Employees must either work or reside within the HealthKeepers Inc. service area in order to enroll in the POS plan. Types of Organizations Ineligible for Coverage Any group failing to meet the requirements previously explained will be ineligible for coverage. In addition, the following are also ineligible for group coverage: A group comprised of members as opposed to employees, such as societies and clubs Trusts 5

6 Groups engaged in seasonal business which reduces operations for a portion of the year to the extent that no employee meets the employee eligibility requirements defined on page 8, Eligible Employee Multiple employer groups and associations Groups that maintain only a Post Office Box residence in our service area. Employee leasing groups/professional Employment Organizations (PEO s)(see note on PEO s on page 10) Groups having more than one health carrier, other than an Anthem Multi-Option program (see page 7) Common Control Companies with common ownership will be considered a single employer if the companies fall under the definition of common control provided under the Health Insurance Portability and Accountability Act (HIPAA). HIPAA states that all entities treated as a single entity under subsections (b), (c), (m) or (o) of section 414 of the Internal Revenue Code shall be considered as one employer. If such an account meets this definition, all entities must be written together in a single account. If they are not considered to be one employer, they may be written separately. As a general rule there must be 80% common ownership between the companies for this requirement to apply. The account may have to consult with its attorney or accountant to see if it meets this criteria. Underwriting will allow groups with more than 50% common ownership to be combined, if requested. Family or marital relationships do not imply common ownership of different businesses. The addition of an affiliate or subsidiary to the group policy subsequent to the initial enrollment of the group may be permitted with Underwriting s approval if the affiliate or subsidiary is located within Anthem s service area and would otherwise qualify as an eligible group. Location within Anthem s service area will be waived for newly acquired affiliates or subsidiaries if there is more than 80% common control. In all cases where subsidiaries or affiliates are to be included, the following must be on or attached to the Group Application: the name and type of each organization (proprietorship, partnership, etc.) the basis of affiliation (i.e., percentage of ownership) and names of all owners enrollment materials for each company as outlined in the Documents Required to Establish Coverage section Unless there is a subsequent change in ownership that makes the combination of affiliates or subsidiaries ineligible, the decision to enroll as a combined account or as separate accounts is irrevocable. Since it is often difficult to determine if proper ownership exists, more detailed information concerning the ownership may be required. Renewal Date The group's renewal date will be assigned as the first of the month in which coverage becomes effective whether the effective date was the first or fifteenth of the month. 6

7 Example: Coverage effective on September 1 will renew next September 1. Coverage effective September 15 will renew next September 1. Multi-Option Multi-option is a multiple product option program offering combinations of PPO and/or POS products. The following requirements apply: Anthem and HealthKeepers must be the sole carriers The same medical product with two different prescription drug options cannot paired Optional benefits, if purchased, must be purchased for all groups in the account if the benefits are available for the respective products. Groups may offer three products. Employees may select or change between multi-option products: upon initial enrollment on the group s renewal date if the group is adding, eliminating or changing a multi-option product mid-year and if the new product is a lower cost product than the product(s) currently being offered, employees enrolled in a higher or eliminated option will be allowed to transfer to the new, lower cost option when the employee or dependent becomes eligible for a special enrollment period (see page 14) if there is a significant disruption of the provider network (to be determined at the sole discretion of Anthem) when the member is no longer eligible to be enrolled in the POS option Groups may provide alternate products to employees living outside the plan service area. Optional Riders If offered, optional riders must be applied to all groups in the account, if the rider is available. Sole Carrier Anthem and HealthKeepers must be the only group-sponsored health coverage offered. 7

8 Section II. Requirements For Group Membership Eligible Employees Unless otherwise agreed to in writing by Anthem, an employee is eligible for a group plan if he or she is: An active employee of the policyholder, or a related company of the policyholder (if covered under the same policy) who works at least 30 hours per week on a consistent basis Has satisfied any applicable group imposed waiting period requirement, Not a temporary employee Paid at least Federal minimum wage reportable to the IRS on Form W-2 (documentation for owners may be different); or Eligible for continuous coverage under state or federal laws, e.g., COBRA The term active employee used above includes an owner, partner, director, or officer of the policyholder or related company who works the requisite time period described above. Owners, partners and proprietors must work for pay or profit verifiable from tax reports. Salary or wages paid to nonowner officers and directors must be reportable on Form W-2. The term active employee also includes an enrolled employee who is not currently working due to illness, injury or leave of absence. During the disability or leave of absence period, the employer is required to contribute to the employee s premium in the same amount as for other active employees. See time restrictions for Ineligible Employee below. Employees in a POS plan must either work or live within the HealthKeepers service area. Ineligible Employees Employees not eligible for group health coverage include Part-time employees who, for example, work less than 30 hours per week Temporary employees Seasonal employees, defined as employees scheduled to work less than 120 days Partners, owners, directors, officers (except as defined above) Independent contractors (persons compensated on IRS Form 1099) Unpaid workers/volunteers Employees not having satisfied the group-imposed waiting period Early retirees, unless the group has been approved for early retiree coverage Employees on Long Term Disability Employees who have not worked for six months due to illness or injury (even if the person is covered by Workers Compensation) or for 12 weeks due to leave of absence (LOA) or temporary layoff. o A person must be back at work full-time for 2 consecutive weeks and released by his/her attending physician to return to full-time work before the six months recovery period can be restored. Otherwise, any related absences that occur will be considered part of the same absence. o A total of 12 weeks LOA or temporary layoff can be taken during any rolling 12 month period. 8

9 Employees not scheduled to return to work Eligible Dependents Subject to eligibility criteria set by the group, an eligible dependent may be defined as: The Subscriber's legal spouse. Domestic Partner to qualify as a Domestic Partner, the Domestic Partner must: o Be the employee s sole Domestic Partner o Have been in the relationship for 12 months or more o Be mentally competent o Not be related to the employee by blood closer than permitted by state law for marriage o Not be married to anyone else o Be financially interdependent with the employee Domestic Partners can be the same or opposite sex. The employee s unmarried or married child under the age of 26 which includes: o the employee s newborn, natural child, or legally adopted child, or child placed in the home for adoption o the employee s stepchild o o children of the employee s Domestic Partner any other child for whom the employee is the legal guardian or has court ordered custody, e.g. a foster child The employee s unmarried dependent child 26 years of age or older who is incapable of self-support because of intellectual disability or a physical handicap which commenced prior to the child reaching age 26. The Company may require a periodic certification as to the child's disability. Coverage for the employee's non-handicapped child ends on the last day of the month in which the child reaches age 26. Ineligible Dependents Ex-spouse Any child living with the employee who does not meet the requirements of an Eligible Dependent Retirees Retirees may be carried on the group's program under a Medicare supplement policy, if available. Early Retirees Early Retirees are defined as employees who retire between the ages of 55 and 65. Early Retiree coverage can be offered subject to the following requirements if written approval is received from Underwriting: The group must submit for review its Employee Handbook, Summary Plan Description, or other documentation deemed suitable by Anthem that gives the requirements to continue enrollment as an Early Retiree. Requirements that are a combination of age and years of service will be considered Coverage can be added at the group's initial enrollment or at renewal only Early Retiree coverage that was part of the group s benefit plan at the time of enrollment but was not submitted for approval can be approved retroactively upon receipt of appropriate documentation 9

10 Coverage is available only to employees who were enrolled in the group s plan immediately prior to becoming an early retiree At age 65 the Early Retiree's coverage, including any covered dependents, will terminate. Early Retirees in a group that is transferred to Small Group will be terminated and be offered conversion to an individual product. Professional Employment Organizations (PEOs) If the group provides employee leasing services or is a Professional Employment Organization (PEO), a distinction must be made between employees of the group, leased employees, and temporary employees. Eligibility for health coverage is dependent on the classification of the employee. Employee Leasing Services: Personnel service organizations that provide substantial support to a recipient employer through leased employees. Substantial support: Support is substantial if 50% or more of the staff are leased employees. Recipient employer: Organization for which the employee furnished by the personnel service organization performs services. Leased employee: any person who is not an employee of the recipient employer and who performs services for the recipient employer under the following conditions: the services are provided subject to an agreement between the leasing organization and the recipient employer; the personnel perform such services for the recipient on a substantially full time, permanent basis that would meet Anthem s requirements for eligibility for health care or dental coverage; such services are performed under the primary direction and control of the recipient employer. Temporary Employee Services: Personnel service organizations that provide employees for incidental support to a recipient employer. Incidental support: Support is incidental if less than 50% of the staff is supplied by the temporary employee service organization or if the support is temporary in nature. Available Coverage Leased Employee from Employee Leasing Service: Eligible for the health or dental plan issued to the recipient employer Not eligible for coverage under the Employee Leasing Company plan Employee of Temporary Employee Service: Eligible for the health or dental plan of the Temporary Employee Services organization if the employee meets Anthem s requirements for eligibility Not eligible for coverage under the recipient employer plan 10

11 Enrollment of Recipient Employer/PEO Client Group Group coverage is available to PEO client groups on the same basis as non-client groups, however documentation to enroll may differ. While a VEC for the client group is encouraged, it may not be available if the PEO submits a combined VEC for all of its clients. If not available, submit the most recent payroll listing of the client group. Classes of Employees A "class of employee" is a defined segment of employees of a single employer where the classes are differentiated based on employment related factors. For purposes of healthcare coverage, Anthem will approve the following classes: Management/non management Union/non union Salaried/hourly Job title Physical location of facility Requests for approval of other classes of employees must be submitted to Underwriting. Groups that employ more than 50 employees may offer coverage to only certain eligible employees who are members of a clearly defined class of employees. However, the class of employees not covered by Anthem must have no other employer-sponsored group health care coverage, except for union and non-union situations. If a union is involved, the union (not the employer) must sponsor the other group health care plan. Types of Coverage Available Employee - Only Available to individual employees who do not cover any dependents and who do not qualify for Medicare supplemental coverage. Two policies for Employee-Only coverage cannot be written for an employee and spouse, unless the spouse is also an eligible employee of the group. Employee Child Available to individual employees and eligible dependent child. Employee Children Available to individual employees and eligible dependent children. Employee -Spouse Available to employees who will only cover their spouses and no other dependents. Employee - Family Available to employees who will cover their spouses and all other eligible dependents. 11

12 Medicare Supplement Available to retirees, employees, and spouses over age 65 who are enrolled in both Part A and Part B of Medicare. Group billed Medicare supplements are available for PPO groups. NOTE: Medicare Secondary Payer rules prohibit carrying an active employee s Medicare supplement policy on the group bill for companies that employ 20 or more people on each working day for 20 or more weeks in the current or preceding calendar year. Medicare supplements are not available to groups enrolled in HealthKeepers. Medicare Carve-Out Carve-Out is a group Medicare supplement secondary payment category that is no longer offered. Members already enrolled in Carve-Out may keep it, but no new members will be added. Effective Date of Coverage The effective dates of coverage for employees will be the date requested by the group consistent with the group s waiting period and for whom premiums are paid. Also, see Late Entrants (page 13) and effective dates of coverage under Special Enrollment Periods (page 14) Termination of Group Membership Coverage for members can end for a variety of reasons, such as an employee leaves the company; an employee becomes ineligible for regular group coverage (i.e., goes from full-time to parttime); divorce, if spouse was covered The effective date of termination will be: the last day of the month in which the member becomes ineligible or requests termination and for which payment was made; or if the group has other than first of month effective dates (odd effective dates), the date requested by the group Companies should follow the federal guidelines under the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) when offering continuing coverage to qualified beneficiaries. It is the responsibility of the group administrator or decision maker to notify Anthem immediately of any change in the eligibility status of a member, dependent, or the company itself. 12

13 Group-Imposed Waiting Period The group-imposed waiting period is a length of time determined by the employer that all employees of the group must serve prior to becoming eligible for coverage in the group's health care program. The waiting period can be waived at the group s initial enrollment, if requested. If waived, the waiver applies to all eligible owners and employees. In general, it is possible to have multiple waiting periods as long as they are administered along class distinctions, such as management and non-management or salaried and hourly. Requests for exceptions to the group-imposed waiting period for owners, key employees or special circumstances cannot be honored. For example, new owners of an entity, such as an incorporated business, whose legal status is unaffected by the change in ownership must serve the GIWP. See page 18 under New Owner. Limitations GIWP s can range from (1) first of month following date of hire to first of month following 60 days of continuous employment or (2) date of hire up to 90 days from date of hire in 30 day increments. A GIWP cannot exceed 90 days. Changing GIWP Can be changed at renewal and one other time during the contract year Changes will not be retroactive. The effective date of the change will be effective the first of the month after the date of receipt by Anthem An employee s GIWP will be the GIWP in effect on the employee s date of hire and will not be changed Changes for first of month effective dates to other than first of month effective dates(odd effective dates) can be made only at renewal Adding a new GIWP for a new class of employee will count as a mid-year change Rehires former employees who are re-hired within 13 weeks and who were enrolled at the time of termination can re-enroll without serving the GIWP. Changing from Ineligible Class to Eligible Class GIWP will be applied from the date of eligibility. Exception: formerly eligible employees who were changed to an ineligible class and then back to an eligible class with 62 days of becoming ineligible and who were enrolled immediately prior to becoming ineligible can re-enroll without serving the GIWP. Mergers and Acquisitions Employees already enrolled in the acquired company s health plan will be enrolled in the acquiring company s plan without serving the GIWP. The acquired employees still in the GIWP will serve the GIWP of the acquiring company. Late Entrants An employee or dependent who is not enrolled within 31 days after becoming eligible: will be permitted to enroll at the group's open enrollment period will be allowed to enroll during a special enrollment period, as described below will be permitted to enroll if named in a Qualified Medical Child Support Order. In order for the child to enroll, the employee parent must also enroll or already be enrolled. 13

14 Open Enrollment Period An open enrollment period is the time during which employees select their health benefits for the upcoming year. Open enrollment usually coincides with the date of the group s renewal. Special Enrollment Periods. Special enrollment periods are allowed due to certain: loss of eligibility for other qualifying coverage; changes in family status; enrollment in FAMIS Select, a state sponsored program for uninsured children A special enrollment period is allowed due to a loss of eligibility for other qualifying coverage if the employee or dependent: declined coverage when he/she was first eligible for it; later loses the other qualifying coverage; and requests enrollment within 31 days thereafter. During a special enrollment period the employee may change to any medical plan offered by the employer. Loss of eligibility for other qualifying coverage includes (but is not limited to): group health coverage which ended because the employer ceased paying the contributions group health coverage which ended due to a loss of eligibility caused by legal separation, divorce, death, termination of employment, a reduction in work hours, or cessation of dependent status. Termination of a policy with a fixed time period, such as Anthem s Short Option individual policy, is not loss of eligibility and does not give rights to a special enrollment period. COBRA continuation coverage which has been exhausted loss of benefits because the individual no longer lives or works in the HealthKeepers service area, and if covered under a group POS plan, no other coverage is available a situation in which a plan no longer offers any benefits to the class of similarly situated individuals Voluntary termination of coverage is not a qualifying event. For eligible employees enrolling during a special enrollment period due to loss of eligibility for other qualifying coverage, coverage will begin on the effective date of the loss. A special enrollment period is allowed due to a change in family status if the eligible employee gains a dependent through: marriage, birth, adoption, 14

15 placement for adoption When the eligible employee gains a dependent, the special enrollment period is allowed for the eligible employee and all of his or her eligible dependents. The special enrollment period will be the 31 days beginning on the date the eligible employee gains at least one eligible dependent for one of the reasons listed above. For persons enrolled during a special enrollment period due to a change in family status, coverage will begin: on the date of marriage or the first day of the month following marriage, if the special enrollment period is due to marriage. on the date of birth of the newborn, if the special enrollment period is due to the birth of a child. on the date of adoption or date of placement for adoption, if the special enrollment period is due to adoption or placement for adoption. Other Enrollment Periods Enrollment other than during open enrollment or a special enrollment period will also be allowed in certain limited circumstances. These circumstances include: the issuance of a Qualified Medical Child Support Order requiring an employee to provide health coverage for his or her children. In order for the child to enroll, the employee parent must also enroll or already be enrolled. changes necessitated by the provisions of the Section 125 plan of the employee s spouse. Certain changes in coverage or cost of benefits provided under a cafeteria plan may permit election changes under that plan by the employee s spouse. Anthem and HealthKeepers will accommodate these situations by allowing enrollment changes by the affected employee that are consistent with the change made by the spouse. For example, a spouse s employer Section 125 plan may provide that elections may be changed if there is a significant change in the amount participants must contribute. If the spouse changes his or her election for one of these reasons, Anthem will allow the employee to make a corresponding enrollment change. other enrollment opportunities as permitted under IRS regulations covering Section 125 plans Enrollment in FAMIS Select, a state sponsored program for uninsured children. Under the FAMIS Select program financial assistance is provided to families to apply toward the purchase of health care coverage. Uninsured children will be allowed to enroll in the parent s health plan if enrolling within 31 days of enrollment in FAMIS Select. Additionally, if the parent is not currently enrolled and if the financial assistance under FAMIS makes coverage affordable for the rest of the family, all family members may enroll. Children may not enroll without the parent/employee. 15

16 Section III. Changes To The Group Benefit Changes Benefit changes should be received prior to the requested effective date and will normally be made on the renewal date of the group. Otherwise, the group's benefits are expected to be in effect for the entire policy year. There are a few exceptions: A group, including a group with multi-options, can downgrade at any time during the year. A downgrade is defined to be a change to lower cost benefits that were available at the time of renewal. Groups can add or change a new multi-option product mid-year, if the new product is a lower cost product than the product(s) currently being offered. Employees enrolled in a higher option will be allowed to transfer to the new, lower cost option at this time. A HealthKeepers group will be allowed to add an equivalent or lower cost PPO product mid-year to accommodate an out of area employee. If the PPO product is not a lower cost product from the existing POS product, other enrolled employees will not be permitted to transfer to the PPO product until the next open enrollment. (See dot point above.) Contact the underwriter if questions regarding equivalent. A special benefit change period may be permitted if providers leave the network and their termination is considered to be significantly disruptive. These decisions are based on possible disruption to all groups in the affected area and are not decided on a group by group basis. During a special benefit change period, groups will be allowed to either upgrade or downgrade benefits. If benefits are changed at other than the renewal date, the renewal date does not change. If a group decides to change benefits after its renewal (benefit change to take effect on a date other than its renewal date), the change is defined as a material modification. In these cases the group must insure the effective date of the change(s) will be not less than 60 days from the day it sent its employees an updated Summary of Benefits and Coverage (SBC) showing the new benefits. Optional health benefits can be added or removed only on the group renewal date. However, EAP, life, disability, and dental can be added at any time. Vision can be added during the first six months of the plan year. Mid-year Election Changes in Sec. 125 Plans A basic rule of IRC Section 125 plans requires participants to make elections for benefits under the plan prior to the period of coverage and then to keep with those elections throughout the plan year. A plan, however, may permit participants to revoke elections and make new ones under limited circumstances. If the cafeteria plan permits election changes, Anthem will accommodate these situations by allowing enrollment changes that are consistent with Section 125 regulations. Area Changes If a group changes locations or moves from one rating area to another, the premium will not be recalculated until the next renewal. 16

17 Business Reorganizations Merger A merger is defined as the combination of two or more entities where the combined entity is one of the original corporate parties to the combination. Example: Corporation A and Corporation B are said to combine by merger if Corporation A is the surviving entity. (Sometimes the term acquisition is used instead of merger.) Since Corporation A continues to exist, the original contract with Corporation A continues to be in force. No additional paperwork is needed to continue coverage for Corporation A. If Corporation B is enrolled with Anthem Blue Cross and Blue Shield, Corporation B's enrollment data along with its experience must be reviewed by Underwriting to determine the impact, if any, on premiums before transferring the employees into Corporation A. Premiums for the combined corporation may need to be revised. If Corporation B is not an enrolled group, applications must be submitted before final premiums can be set for the combined corporation. In all cases, revised premiums are considered on a case by case basis. The renewal date for Corporation A will remain unchanged. Legal documentation of the merger may be required. Examples of such documents include contracts or new Articles of Incorporation. Consolidation A consolidation is defined as the combination of two or more entities where the combined entity is a newly created corporation. Example: Corporation X and Corporation Y combine by consolidation if the entity takes the form of a newly created Corporation Z. Since Corporation Z is the new legal entity, a new Group Application must be signed by Corporation Z and the old group number(s) canceled. A new policy year will begin. If Corporation X and Y are enrolled with Anthem, Corporation X's and Y's enrollment data along with their experience must be reviewed by Underwriting to determine the premium before transferring the employees into Corporation Z. If either Corporation X or Corporation Y is not an enrolled group, applications must be submitted before final premiums can be set. In all cases, revised premiums are considered on a case by case basis. Legal documentation of the consolidation may be required. Examples of such documents include contracts or new Articles of Incorporation. 17

18 New Owner Anthem contracts with a legal entity to provide health care coverage. When that entity changes, a new policy must be signed. Proprietorship - The legal entity changes when a new owner takes over a proprietorship. A new Group Application must be signed. Partnership - If a partnership sells the entity to a new owner(s), the business entity changes and a new Group Application must be signed. If the partnership simply changes because new partners are added or existing partners leave, a new Group Application is not required. Corporation - There is no change in the legal entity of the business when the stockholder(s) of a corporation sells out to a new stockholder(s). A new Group Application does not need to be signed. The original contract with the business continues in force. Buying Assets of Existing Groups On occasion a new owner will purchase the assets but not the stock of an existing group (i.e., liabilities are not assumed) and continue to operate under a new or similar name. In this situation a contract must be established with the new business since it assumes no liability or contractual agreements of the former group. If there is no significant change in enrollment or business operations, only a new Group Application is needed. If there is a significant change in enrollment or business operations, consult Underwriting to see if rates, plan year or group number needs to be changed. Group Name Change Group name changes that do not involve a change in the group s tax identification number need only a name change request to be sent to Enrollment and Billing. If the group s tax ID is changing, follow the requirements for Buying Assets of Existing Groups above. New Business Entity with Same Employees Existing groups may reorganize under a new tax ID and begin a different business operation. Consult Underwriting to see if the group needs to be re-rated prior to submitting a quote request. As a general rule, unless there is a significant change in enrollment, only a new Group Application is needed. Transfers Between Lines of Business Employer size generally determines in which market segment a group belongs, such as Small Group or Large Group. As groups grow or decline in size, it may be appropriate to transfer the group to another market segment. The Underwriting Department will monitor these changes and identify groups to transfer. Transfers are normally made at the group's renewal. Splitting Groups For various reasons a business will sometimes reorganize its legal structure by splitting the existing business into two or more businesses. In these cases the group policy will be re-rated only if there 18

19 has been a significant change in ownership that does not allow the multiple businesses to be rated as affiliated companies. See Common Control on page 6. Combining Groups Business owners sometimes own more than one legal business entity. When the owner enrolls his or her business, he or she has the choice of enrolling all business under one policy as affiliated companies or enrolling the groups separately. If the businesses are enrolled as separate groups, they will not be allowed to combine at a future time. Likewise, if combined, the affiliated companies may not split off into separate group policies unless there has been a significant ownership change. See Splitting Groups above. Manipulation of Segments Any manipulation of the group for the purpose of affecting the premium is prohibited. Changes in Agent of Record or Commission Payments A new agent of record letter must be submitted when a change in agent occurs. Changes to commission amounts paid on Dental groups must be provided in writing to Underwriting at least 60 days prior to the renewal date. Changes to agent commissions can occur only on renewal date. Agent commissions on Medical groups are standardized as determined by Anthem. Changes in Enrollment Whenever any group acquires or loses a significant number of employees, i.e., 10% or more, the group s coverage may be subject to review, including the possibility of a special renewal or termination at Anthem s discretion. Underwriting reserves the right to revise the monthly premium in the event of an enrollment change of 10% or more. In such cases requests for upgrade of benefits will be handled on a case by case basis. Changes in Covered Dependents Whenever a policyholder adds a dependent, a new Employee application or Member Change form must be submitted. Whenever a dependent transfers to a policy in his/her own name within the same group, an application must be submitted. 19

20 Section IV. Termination Of Group Coverage Non-Payment of Premium A group that fails to remit the premium prior to the expiration of the applicable grace period will be terminated. Employer Goes Out of Business A group that goes out of business will have its group coverage arrangements terminated as of the paid-to-date, provided that Anthem was notified on a timely basis. Employer Requests Termination Employers requesting termination of their groups must do so in writing. The written request must come from the group and state whether the group has obtained other coverage. If other group coverage has been obtained, conversion privileges to individual policies will not be offered, except for those employees covered under a Medicare Supplement policy. Failure to notify Anthem in writing in accordance with the contract will result in the group being liable for premiums covering the 31-day grace period. Section V. Transitional Relief Employers with total employees, whether they are full-time or part-time, will be required to have Affordable Care Act (ACA) compliant small employer plans beginning with their 2016 renewal. However, Virginia legislature passed a law allowing carriers to offer these size employer groups to retain their current medical products and delay the move to ACA-compliant plans until This option to delay the move is referred to Transitional Relief. Employers between employees changing carriers effective 01/01/16 and later will result in a loss of grandmothered large group benefit plans and will need to move to ACA plans. The transitional relief period runs from 01/01/16 through 10/01/16. 10/01/16 is the last date to renew with current non-aca products. For groups with an October 2015 renewal date, you can automatically renew with current plans on 10/01/16. Groups with November and December renewal dates will be given the option to renew early on 10/01/16 to take advantage of this last date to extend current plans until 10/01/17. 20

21 Section VI. Associations Enrolling in a Value Added Association For Value Added associations, the addition of Value Added benefits is allowed only: At the time of sale At the group's renewal 21

22 Anthem Health Plans of Virginia, Inc. trades as Anthem Blue Cross and Blue Shield in Virginia, and its service area is all of Virginia except for the City of Fairfax, the Town of Vienna, and the area east of State Route 123. Anthem Blue Cross and BlueShield and its affiliate HealthKeepers, Inc. are independent licensees of the Blue Cross Blue Shield Association. ANTHEM is a registered trademark of Anthem Insurance Companies, Inc. The Blue Cross and Blue Shield names and symbols are registered marks of the Blue Cross and Blue Shield Association. 22

23 UNDERWRITING GUIDELINES Large Group Mid-Size Accounts More Than 100 Employees, 100 or Less Enrolled Anthem Blue Cross and Blue Shield And Its Affiliate HealthKeepers, Inc. For New Sales and Renewals Effective January 2016 For Broker, Sales and Internal Staff use only

24 Change Highlights Changes are in italics on the indicated pages: HMO has been replaced by either HealthKeepers (when referring to the company or service area) or POS (if referring to product). Those changes are not italicized. Page 5: confirms that groups with 50-70% out of area require Underwriting approval and an out of state load applies. Page 7: Quoting or re-enrollment of former groups may be declined due to financial or pending legal issues Page 8: Clarifies that a maximum of three products can be offered and that PY and CY cannot be mixed Page 10: adds foster child as an example of an eligible dependent Page 14: Changes to the Group Imposed Waiting Period to be effective the first of the month following the date received at Anthem. (July) Group Imposed Waiting Period for Rehires changed to 13 weeks beginning with date of termination/effective date of cancellation (July) Page 15: clarifies that voluntary loss of coverage is not a qualifying event Pages 16 and 17: changes references from cafeteria plans to Section 125 plan Page 19: changes Group size to Employer size Page 20: adds Underwriting may re-rate a group if enrollment changes by 10% or more Page 21: removed termination for below minimum participation 2

25 Table of Contents Section I. Group Health Care Coverage Types of Organizations Eligible for Coverage...5 Location of Group...5 Types of Organizations Ineligible for Coverage...6 Common Control...6 Documents Required to Establish Coverage.. 7 Effective Date of Coverage...7 Re-enrollment of Former Groups...7 Renewal Date...7 Multi-Option...7 Optional Riders 8 Sole Carrier...8 Section II. Requirements for Group Membership Eligible Employees...9 Ineligible Employees...9 Eligible Dependents...10 Ineligible Dependents...10 Retirees...10 Early Retirees...10 Professional Employment Organizations...11 Classes of Employees...12 Types of Coverage Available...12 Medicare Supplement...13 Effective Date of Coverage...13 Termination of Group Membership...13 Group-Imposed Waiting Period...13 Late Entrants...14 Open Enrollment Period.14 Special Enrollment Periods 14 Other Enrollment Periods...16 Section III. Changes to the Group Benefit Changes Mid-year Election Changes to Sec. 125 Plans Area Changes Business Reorganizations Mergers 18 Consolidations..18 New Owner Buying Assets of Existing Group Group Name Changes New Business Entity with Same Employees Transfers between Lines of Business Splitting Groups Combining Groups Manipulation of Segments Changes in Agent of Record or Commission Payment

26 Changes in Enrollment..20 Changes in Covered Dependents Section IV. Termination of Group Coverage Non-Payment of Premium Employer Goes Out of Business Employer Requests Termination Section V. Associations Enrolling in an Association

27 Section I. Group Health Care Coverage Types of Organizations Eligible for Coverage Eligible groups are generally defined as: Organizations engaged in trade or business Religious institutions Charitable or non-profit institutions Educational institutions Governmental agencies and subdivisions The organization must be a legal entity established for a strong, mutual, and continuing interest other than for insurance purposes. In addition, the business must maintain a bona fide employer-employee relationship with all persons insured under the group's health care program. Each group must have a designated individual with contract signing authority and decision making authority for health care coverage who normally works at the group's location within Anthem Blue Cross and Blue Shield's service area. Location of Group The group must be physically located and headquartered within the service area of Anthem. Anthem's service area is defined as the State of Virginia with the exception of the area east of State Route 123 in Northern Virginia, the city of Fairfax and the town of Vienna. There is one exception. Groups headquartered out of area but with a separate branch office located within Anthem's service area may be considered separately. These groups can receive a quote for the inarea branch if decision making authority is delegated to an employee working in that branch. Enrollment in these cases is limited to the employees working in the in-area office. Employees must either work or reside within the HealthKeepers Inc. service area in order to enroll in the POS plan. As a general rule, groups with more than 50% of their enrolling employees working out of the service area will not be quoted. If a group has more than 50% but 70% or less of its enrolling employees working out of the service area, your underwriter may grant an exception to this. The underwriter must be notified when the quote is submitted, and the rates will be adjusted accordingly. 5

28 Types of Organizations Ineligible for Coverage Any group failing to meet the requirements previously explained will be ineligible for coverage. In addition, the following are also ineligible for group coverage: A group comprised of members as opposed to employees, such as societies and clubs Trusts Groups engaged in seasonal business which reduces operations for a portion of the year to the extent that no employee meets the employee eligibility requirements defined on page 9, Eligible Employee Multiple employer groups and associations Groups that maintain only a Post Office Box residence in our service area. Employee leasing groups/professional Employment Organizations (PEO s)(see note on PEO s on page 11) Groups having more than one health carrier, other than an Anthem Multi-Option program (see page 7) Common Control Companies with common ownership will be considered a single employer if the companies fall under the definition of common control provided under the Health Insurance Portability and Accountability Act (HIPAA). HIPAA states that all entities treated as a single entity under subsections (b), (c), (m) or (o) of section 414 of the Internal Revenue Code shall be considered as one employer. If such an account meets this definition, all entities must be written together in a single account. If they are not considered to be one employer, they may be written separately. As a general rule there must be 80% common ownership between the companies for this requirement to apply. The account may have to consult with its attorney or accountant to see if it meets this criteria. Underwriting will allow groups with more than 50% common ownership to be combined, if requested. Family or marital relationships do not imply common ownership of different businesses. The addition of an affiliate or subsidiary to the group policy subsequent to the initial enrollment of the group may be permitted with Underwriting approval if the affiliate or subsidiary is located within Anthem s service area and would otherwise qualify as an eligible group. Location within Anthem s service area will be waived for newly acquired affiliates or subsidiaries if there is more than 80% common control. In all cases where subsidiaries or affiliates are to be included, the following must be on or attached to the Group Application: the name and type of each organization (proprietorship, partnership, etc.) the basis of affiliation (i.e., percentage of ownership) and names of all owners enrollment materials for each company as outlined in the Documents Required to Establish Coverage section Unless there is a subsequent change in ownership that makes the combination of affiliates or subsidiaries ineligible, the decision to enroll as a combined account or as separate accounts is irrevocable. 6

29 Since it is often difficult to determine if proper ownership exists, more detailed information concerning the ownership may be required. Documents Required to Establish Coverage Each enrolling group will furnish: A completed and signed Group Application Applications for each enrolling employee A recent Employers Quarterly Tax Report (VEC) or most recent payroll showing all employees designated as full-time or part-time. A list of all employees, retirees, and COBRA participants who are currently enrolled in health coverage, such as a current group bill Check for the first month's premium Effective Date of Coverage Groups may request a coverage effective date of the first or fifteenth of any month subject to the timely receipt of the following: Applications for underwriting must be received on or before the effective date. For an effective date of the first of the month, all documents required for coverage must be received by the 15 th of the effective month. For an effective date of the 15 th of the month, all documents required for coverage must be received by the end of the effective month. Re-enrollment of Former Groups Re-enrollment of former groups may be subject to special underwriting consideration. In all cases, formerly enrolled groups must be indicated as such on the quote request. Anthem reserves the right to not provide a rate quote or disallow a new sale to a previously covered group that has outstanding premium or fee balances. Pending legal action between Anthem and the former client may also preclude a sale or quote. Renewal Date The group's renewal date will be assigned as the first of the month in which coverage becomes effective whether the effective date was the first or fifteenth of the month. Example: Coverage effective on September 1 will renew next September 1. Coverage effective September 15 will renew next September 1. Multi-Option Multi-option is a multiple product option program offering combinations of PPO and/or POS products. The following requirements apply: Anthem and HealthKeepers must be the sole carriers The same medical product with two different prescription drug options cannot paired Optional benefits, if purchased, must be purchased for all groups in the account if the benefits are available for the respective products. 7