Steve Shorr Insurance Authorized Agent 310.519.1335 http://healthreformquotes.com/ is Th do e cu Se ay no at e rb ge n lo w of w w p to at e th ge pa k lin e om rh e th tm en m ou or th e tc os m nt re ur m n io at co rm s. fo te in uo Q rm o ef ge pa R lth ea.h is th For businesses with 2-50 employees, effective March 2010 Underwriting Guidelines Underwriting Guidelines for Small Groups Effective January 2014 BCAHB0590C Rev. 1/14
Important contact information Small Group Underwriting address Anthem Blue Cross P.O. Box 9042 Oxnard, CA 93031-9042 For Producers section of website My User ID: My Password: Small Group Underwriting New Business: newsguwca@wellpoint.com Existing Business: sguwca@wellpoint.com New Business Telephone: 855-239-9251 New Business Fax: 866-795-5442 Existing Business Fax: 877-363-9126 For overnight delivery only Anthem Blue Cross Small Group Underwriting Department 4553 La Tienda Drive Thousand Oaks, CA 91362 Small Group Customer Service Telephone: 855-854-1429 Hours: 8:00 a.m. to 6 p.m. PST (Monday Friday) Broker Services Telephone: 800-678-4466 Email: Agent.Support@wellpoint.com Hours: 8:30 a.m. to 5 p.m. PST (Monday Thursday) 8:30 a.m. to 3 p.m. PST on Friday Rapid Quote Telephone: 877-275-3700 Email: rapidquote@wellpoint.com Workers Compensation new business Employers Compensation Insurance Company P.O. Box 9057 Oxnard, CA 93031-9057 Telephone: 888-682-6671 Anthem Blue Cross website anthem.com/ca To order supplies Fax: 800-504-1956 (fax completed Agent Supply Request form only) Online: Go to anthem.com/ca > Producers tab > log in > Agent Supplies and Order Supplies Online. View these guidelines and other documents online To view these guidelines and other documents online, please visit anthem.com/ca and click Producers. Then, log in and select Small Group. From there, you can view, download and print our forms and documents. Anthem Dental Prime and Complete DeCare Broker Connect Team Telephone: 877-567-1802 Hours: 5 a.m. to 5 p.m. PST (Monday-Friday) Email: connectca@anthemdentaladmin.com Mail: Anthem Connect 730 S Broadway Gilbert, MN 55741 SBC Links: Link for 2013 and prior years pre-aca-compliant plans: Find-sbc.com Link for 2014 ACA-compliant plans: sbc.anthem.com Producer Tool Box: anthem.com/ca/health-insurance/ home/overview; Click Producers. Easy Renew: anthem.com/easyrenew Producer News: news.anthem.com/ca Quoting Tool: healthconnectsystems.com/caquote/login. cfm?site=anthem Standard Industry Classification (SIC) Codes: listsareus.com/business-sic-codes.htm#codes osha.gov/pls/imis/sicsearch.html Making Health Care Reform Work: makinghealthcarereformwork.com
Table of contents Important Contact Information Inside cover Introduction... 1 Section 1 Overview of the underwriting process 1. Requirements for completing forms... 2 2. Guidelines for completing forms... 2 3. Processing time specifications... 3 4. Evaluation criteria... 3 Section 2 General underwriting guidelines for new business 1 Group eligibility requirements... 4 2. Employee eligibility requirements... 4 3. Contribution... 5 4. Medical participation requirements... 6 5. Medical plan names... 6 6 Product type... 7 7. Network options... 7 8. Dental coverage... 8 9. Vision coverage... 8 10. Life coverage... 9 11. Premium Only Plan (P.O.P.)... 9 12. Workers compensation... 9 13. Rating policies... 10 14. Rate and benefit guarantee... 10 15. New group effective date... 10 16. Waiting period... 10 17. Takeover provisions... 10 18. Prior deductible credit/annual maximum copay/dental benefit waiting period credit... 11 19. Eligible dependents... 11 20. Federal regulations.... 11 21. State regulations... 12
Section 3 California underwriting business requirements 1. Sole Proprietors... 13 2. Corporations... 13 3. Partnerships... 14 4. Limited Partnership (LP)... 14 5. Limited Liability Partnership (LLP)... 15 6. Limited Liability Company (LLC)... 15 7 Start-up Group... 15 8 Professional Employer Organization (PEO)... 16 9 Union versus Nonunion... 16 10 Churches... 16 11 Households... 16 Section 4 General underwriting guidelines for existing business 1. Enrollment periods... 17 2. Contract benefit modifications... 17 3. Benefit Modification Job Aid... 18 Section 5 Definitions 1. Late enrollee... 19 2 Guaranteed association... 19 3. Qualified event enrollment period... 20 4. New hires... 20 5. Takeover group/members... 20 Guaranteed association Section 6 Links and forms... 21
Introduction Navigating the new world of health care coverage is full of opportunities and important changes. We must help consumers understand all their options, so they can choose coverage that best fits their needs. Now, more than ever, your clients will depend on you for your experience and knowledge to help them through the process. This Underwriting Guideline has the information and links to tools you need to write new business with our company and continue servicing your existing clients. We re committed to helping you grow your book of business and increase the retention of your clients. While we strive to keep all parties informed of any changes to these guidelines in a timely manner, we may change these guidelines at any time without prior notice. We will communicate changes as updates. Only our Small Group underwriters may make the final decision to accept or decline a case, or change an effective date of coverage. Agents are not authorized to bind or guarantee coverage, or give a specific effective date. Please advise all prospective groups to maintain their current coverage until we notify them that we ve established their coverage. The information contained in this guideline is intended for use by authorized agents only and may not be copied or distributed for any other purpose. 1
Section 1 Overview of the underwriting process 1 Requirements for completing forms 2 Guidelines for completing forms The following documentation is required when submitting new business: a. A copy of agent s quote (based on final enrollment) b. The most current Small Group Employer Application c. The most current applications from all employees enrolling d. Waivers from all employees not electing coverage (Proof of coverage may be required.) e. A copy of the company s most recent Quarterly State Tax Withholding Report with the current employment status of all employees listed 1 (Payroll may be required.) f. If takeover coverage, a copy of the prior carrier s last month s group premium statement g. COBRA/FMLA/Cal-COBRA questionnaire; the last billing statement listing COBRA/Cal-COBRA subscribers h. A completed Check-by-Fax form for 100% of the first month s premium made payable to Anthem Blue Cross (If electronic debit is not agreed to, a company check may be accepted, subject to additional processing time.) i. Statement of Understanding required with all medical plan submissions 2. j. Demand Debit Authorization (Needed when group has enrollment in HRA plans) k. HRA Client Agreement, if enrolling in HRA plans l. Member Social Security Number Exception Request form for enrolling employees and dependents not providing a Social Security Number All questions must be answered, and all signatures and dates must be obtained, before Anthem Blue Cross can begin processing the group s applications. If the group s paperwork is incomplete, the underwriter may be unable to complete the process. Here is additional information you should know: a. The employee s signature date cannot be more than 60 days prior to the requested effective date for new group submissions. b. The employee must complete the application and is solely responsible for its accuracy and completeness. No alteration to pre-printed material on the employee application is acceptable. Altered forms will be rejected. c. Whenever an individual has a language barrier and requires assistance to properly complete the application, the application must be submitted with a signed Anthem Blue Cross Exceptions to Standard Enrollment form/ Translator s Statement from the group or the agent explaining the situation. 1 See Section 3, California Underwriting Business Requirements for Sole Proprietors, Partners or Corporate Officers not appearing on the Quarterly State Tax Withholding Report. 2 This is subject to regulatory review and approval. 2
Steve Shorr Insurance Authorized Agent 310.519.1335 http://healthreformquotes.com/ 3 Processing time specifications 4 Evaluation criteria When you first submit a case, make sure all required forms and other documents are completed accurately and included with your submission. Underwriting is based on the following criteria: Anthem Blue Cross will accept new group submissions by the 5th working day of the month when the application is for the 1st of the month effective date. If the application is made for a 15th of the month effective date, paperwork must be received by the 12th calendar day of the month. b. Any additional information required for making a determination must be received within 10 days of the underwriter requesting the 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. Employee and dependent eligibility Employee participation Employer eligibility Employer contribution Health status (Health questions will be required for Life Underwriting only.) is Th a. a. b. c. d. e. do e cu Se ay no at e rb ge n lo w of w w p to at e th ge pa k lin e om rh e th tm en m ou or th e tc os m nt re ur m n io at co rm fo s. te in uo Q rm o ef ge pa R lth ea.h is th 3
Section 2 General underwriting guidelines for new business 1 Group eligibility requirements Any group qualifying as a small employer and meeting the following eligibility requirements is eligible for Anthem s Small Group (SG) health plans on a guaranteed issue and guaranteed renewability basis. In order for a group to be eligible you have to meet the following: a. Must be a person, firm, proprietary or nonprofit corporation, partnership, public agency or Guaranteed Association. b. On 50% of previous calendar quarter, or calendar year, group employed at least one, but not more than 50, eligible employees, the majority (51% or more) of whom were employed within the state of California. c. The group was not formed primarily for purposes of buying a health care plan and a bona fide employer-employee relationship exists. d. Start-up groups that have been in business for at least six weeks if they meet all other eligibility requirements. e. An individual and his or her spouse will not be deemed as employees with respect to a trade/business, whether incorporated or unincorporated, which is wholly owned by the individual or by the individual and his or her spouse; and (2) a partner in a partnership and his or her spouse will not be deemed as employees with respect to the partnership. This means that: If owned by spouses, a common law employee would be necessary for the group to eligible as a Small Group. Sole proprietors and partners in a partnership that are spouses are not eligible employees on their own and therefore do not qualify as an eligible small group on their own; they must have one common law employee to qualify as an eligible SG. Partners in a partnership (that are not spouses) are eligible for SG coverage on their own if they otherwise meet the definition of an eligible employee per Health and Safety 1357.500(c)(1) (also known as SB2X), including the requirement that they be actively engaged on a full-time basis in the small employer s business and included as employees under a health care service plan contract of a small employer. Owners may demonstrate that they meet the eligible employee criteria by providing W-2s or completing the Eligibility Statement. This logic would apply to other business forms. If owned by nonspouses, the owners may be eligible employees on their own. Owners (that are not spouses) of other business forms are also eligible for SG coverage on their own if they otherwise meet the eligible employee requirements. 2 Employee eligibility requirements a. Permanent employees who are actively engaged on a full-time basis in the conduct of the business of the small employer, with a normal work week of an average of 30 hours per week over the course of a month, at the small employer s regular places of business, who have met any statutorily authorized applicable waitingperiod requirements. b. Sole proprietors, corporate officers, or partners of a partnership, if they are engaged on a full-time basis (average of 30 hours per week) in the small employer s business and included as employees under a health care service plan contract of a small employer c. Permanent employees who work at least 20 hours, but not more than 29 hours, are deemed to be eligible employees if all four of the following apply: They otherwise meet the definition of an eligible employee except for the number of hours worked. The employer offers the employees health coverage under a health benefit plan. All similarly situated individuals are offered coverage under the health benefit plan. The employee must have worked at least 20 hours per normal work week for at least 50% of the weeks in the previous calendar quarter. Anthem may request any necessary information to document the hours and time period in question, including, but not limited to, payroll records and employee wage and tax filings. d. Seasonal, temporary or substitute employees, defined as employees hired with a planned future termination date, are not eligible. Employees compensated on a 1099 basis are not eligible. 4
3 Contribution Employers may choose their preferred approach for contributing to employee health premiums. Payroll deduction is required if contributory. Employers have the following contribution options: Dental (Anthem Dental Prime and Complete) No minimum contribution required Vision A minimum of 50% of each covered employee s monthly vision premium is required. Medical Traditional Option A minimum contribution of 50% or of each covered employee s monthly health premium for EmployeeElect Fixed-Dollar Option Any fixed-dollar amount $100 or greater (in $5 increments) for each covered employee s health premium for EmployeeElect or Percentage and Plan Option A minimum of 50% toward a specific plan, chosen by the employer Note: During the annual open enrollment period 11/15 to 12/15 contribution requirements will not be enforced. Voluntary Vision A minimum of 0% and a maximum of 49% of each covered employee s premium; Voluntary Vision may be 100% employee paid. Life Employers must contribute a minimum of 25% of each covered employee s monthly Life premium. Payroll deduction is required if contributory. Dental Traditional Option A minimum of 50% of each covered employee s monthly dental premium is required. or Fixed-Dollar Option Any fixed-dollar amount $15 or greater (in $5 increments) of each covered employee s monthly dental premium is required. Voluntary Dental A minimum of 0% and a maximum of 49% of each covered employee s monthly voluntary dental premium. Voluntary Dental plans may be 100% employeepaid and cannot be combined with nonvoluntary Small Group Dental plans. 5
Section 2 General underwriting guidelines for new business (cont.) 4 Medical participation requirements The group participation requirements are: 75% for groups with fewer than 10 enrolled subscribers 70% for groups with between 10-19 enrolled subscribers 60% for groups with 20 and over enrolled subscribers The minimum participation is 100% if non-contributory. Note: During the annual open enrollment period 11/15 to 12/15 participation requirements will not be enforced. The effective date will be January 1 of the following year. Anthem Blue Cross may conduct periodic audits to confirm participation levels. The group must maintain the corresponding minimum participation levels in order to remain eligible. Groups are subject to cancellation or nonrenewal if participation falls below the required minimum. For purposes of calculating participation, the following may be considered as valid waivers, subject to receipt of a declination and proof of other coverage, such as: Employer-sponsored group coverage through another employer Medi-Cal Medicare United States military coverage Note: An owner of multiple entities will not be considered a valid waiver if the owner is declining due to coverage under another entity in which he/she holds ownership. 5 Medical plan names a. Premier plans (platinum level) These provide the highest level of benefits, and employees often pay less when they get care. However, these plans have the highest monthly premiums. b. Preferred plans (gold level) These provide richer benefits than the Essential and Core plans, and employees pay less when they get care. However, the monthly premium is higher than with those plans. c. Essential plans (silver level) These offer affordable monthly premiums, but, compared to the Core plans, employees pay less when they get care. d. Core plans (bronze level) These feature broad benefits and the lowest monthly premiums, but employees pay more when they get care; deductibles, copays and cost shares may be higher than with the other plans. e. Metal-equivalent naming structure Actuarial values can be used to compare different plan designs and determine how overall cost sharing differs across plans with different cost-sharing provisions. Minimum and Maximum AV Premier/Platinum 88%/92% Preferred/Gold 78%/82% Essential/Silver 68%/72% Core/Bronze 58%/62% 6
6 Product type Direct Access (PPO) Allows members to go directly to any in-network provider. There is no need to choose a primary care physician (PCP) or get a referral to see other doctors. GuidedAccess (HMO) Requires members to choose a PCP. A referral is required to see other doctors. Health Savings Account (HSA) A savings account for certain plans that members can fund with pre-tax dollars and use to pay for qualified health care expenses, including prescriptions. This is often used with a consumer-driven health plan. Health Reimbursement Account (HRA) These plans are funded by an annual allocation by the group and used for first-dollar coverage. 7 Network options PPO: Statewide PPO network (Prudent Buyer) Provides access to nearly 60,000 California doctors and specialists, and more than 330 hospitals. SELECT PPO network Provides access to more than 40,000 California doctors and specialists, and more than 300 hospitals. BlueCard is not available in the Select PPO network. Groups with out-of-state employees are not eligible for enrollment in the Select PPO network. Note: At enrollment, the group will be required to choose only one PPO network option. HMO: Traditional HMO network (CaliforniaCare) Provides access to more than 40,000 California doctors and specialists, and more than 330 hospitals. SELECT HMO network Provides access to more than 23,000 California doctors and specialists, and nearly 250 hospitals. Priority SELECT HMO network Provides access to more than 7,500 California doctors and specialists, and more than 150 hospitals. Note: At enrollment, the group will be required to choose only one HMO network option. Employers must select a network for each plan type. For example, the employer may offer employees plans available in the Select HMO network alongside the Statewide PPO network. Please note: Not all network options are available in every area. 7
Section 2 General underwriting guidelines for new business (cont.) 8 Dental coverage 9 Vision coverage Employers have the option of selecting all plans for their employees, or designating specific plan options to make available to employees. Standard group participation for EmployeeElect is a minimum of 75% of eligible employees. For Anthem Dental Prime and Complete, it is a minimum of 60% of eligible employees. Minimum contribution requirements are defined in Section 2, number 6. Voluntary Dental plans are offered to groups of 3-50 with a minimum of three enrolling at all times, or 25% participation of eligible employees enrolling, whichever is greater. Voluntary Dental must be offered in conjunction with medical coverage and is not available on a stand-alone basis. Voluntary Dental is only available in California. Pediatric dental All individuals enrolled in Small Group coverage outside a public exchange/marketplace are required to have qualified pediatric dental coverage. If members select a health benefits plan that does not include required pediatric dental coverage, we will automatically enroll members in qualified pediatric dental coverage. The additional cost of this pediatric dental coverage will be added to the employer s billing statement. Please note: These benefits provide important coverage for kids up to age 19, including preventive care, fillings and more extensive services like medically necessary orthodontia. Anthem Blue Cross Life and Health Insurance Company now offers Blue View Vision SM in two plan options designed for Small Business. a. Coverage is available as a stand-alone, or in conjunction with Medical, Dental and Life. b. There are two plans available. Employers may elect one or both options. c. Participation is 75% on EmployeeElect (100% if noncontributory). d. The contribution is 50% on EmployeeElect. All our Small Group health plans include pediatric vision essential health benefits (EHBs), which provide coverage for vision exams and glasses or contacts for kids up to age 19. Members can see any provider in the Blue View Vision SM network, which includes retailers such as LensCrafters and Target Optical, as well as 1-800 CONTACTS. Voluntary Vision a. Is available as a stand-alone product or in conjunction with medical, dental and/or life. b. The participation minimum is 5 enrolling. c. The employers contribution is 0%-49%. 8
10 Life coverage a. Enrollees must be actively at work in order to be eligible for coverage. b. Participation requirements are 75% of eligible employees on the EmployeeElect portfolio. If noncontributory, 100% participation is required. (Cobra or Cal-Cobra applicants are not eligible for life insurance.) c. Employers must contribute a minimum of 25% of the Life premium. d. Life is available to groups of 2 or more. A minimum of two must enroll. e. Dependent Life is available in conjunction with Employee Life only on a guarantee issue basis for $5,000 or $10,000. f. Employer groups with 2-9 eligible enrolling employees are guaranteed for up to $30,000 of life insurance coverage; 10-24 eligible enrolling employees are guaranteed for up to $50,000 of life insurance coverage; and 25-50 eligible enrolling employees are guaranteed up to $100,000 of life insurance coverage. Any life insurance coverage over the guaranteed amounts will require a health questionnaire to be completed, and is subject to underwriting approval. g. For all new groups of 10 or more enrolling employees, Composite Rates will be offered. Composite Rates mean that a qualifying group receives a single rate per $1,000 of Life coverage, (Rates determined by group size, area and SIC code.) h. Future enrollees and new hires must complete the appropriate health questionnaire section, if the amount chosen is more than the Guarantee Issue amount. Life insurance is subject to underwriting approval. i. Supplemental Life is available for groups of 2-50 in addition to the basic Life option on the EmployeeElect portfolio. For groups with two employees, 100% participation is required. For groups of 3-50 employees, a minimum participation of 25% of eligible employees is required, with a minimum of three enrolling employees. Supplemental Life is 100% employee-paid. Supplemental Life is not available on a stand-alone basis, and is subject to underwriting approval. The $100,000 benefit level is only available to groups with 11 or more eligible employees enrolling in Supplemental Life. 11 Premium Only Plan (P.O.P.) P.O.P. is available to any size group and is allowed under a special provision of Section 125 of the IRS Tax Code, which addresses employer and employee tax relief. With a P.O.P., employers must adjust their payroll process and pay the employees portion of their group insurance premiums on a pre-tax basis. Employees must pay a portion of their premium in order to qualify for P.O.P. If the Employer pays the full premium (100%), a P.O.P. cannot be established. WageWorks, will provide all necessary information for a group to install and support a P.O.P. There is a $125 annual fee for the service. Groups that enroll 10 or more eligible employees on Medical and Life will receive the first year s P.O.P. services from WageWorks at no charge. A separate check for the P.O.P. premium made payable to Anthem Blue Cross must be submitted along with the P.O.P. application. If a group applies for Anthem Blue Cross medical coverage concurrently with P.O.P., the group must submit the P.O.P. application and separate check with all other required paperwork. For complete details, order the Employer s Guide to P.O.P. available online at anthem.com/ca. Note: The P.O.P. application cannot be processed until the underwriter has approved the group medical and/or dental, vision and life coverage. Therefore, the P.O.P. effective date assigned by WageWorks may be later than the effective date of the group s medical, dental, vision and life coverage. WageWorks, an independent company that is not affiliated with Anthem Blue Cross, its affiliates or its parent corporation, provides the required material that allows a group to implement the P.O.P. 12 Workers Compensation Workers Compensation insurance is available in conjunction with Medical and is underwritten by Employers Compensation Insurance Company. Integrated MediComp combines group health and Workers Compensation to provide 24-hour coverage for the employee all administered through one source. 9
Section 2 General underwriting guidelines for new business (cont.) 13 Rating policies a. All rates will be based on actual enrollment. b. Rates will be based on the geographic rating region of the employee. c. Approved out-of-state employees will be charged an area-rate based on the location of the employer s place of business. d. Forty-five age bands with a 3-to-1 maximum ratio. e. Medicare primary and secondary rates are the same. 14 Rate and benefit guarantee a. Medical rates are guaranteed for a minimum of 12 months. The anniversary month will determine the timing of future adjustments. b. Stand-alone dental has a 12-month rate guarantee. c. If dental is written in conjunction with medical, it will receive the medical rate guarantee. d. There is no rate guarantee for life coverage. e. Vision rates and benefits are guaranteed for 24 months. Birth date rating changes will occur at the policy anniversary date. The date change will be based on the age of enrollee(s) as of the date of the annual policy contract date. 15 New group 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 waiting period and submission of the Small Group Employee Application. b. Groups will not be guaranteed an effective date unless complete and correct group enrollment materials are received timely and approved by the underwriter. c. It is the agent s responsibility to notify the Underwriting department prior to approval if a change in the requested effective date is to be considered. A request for change will be required in writing from the employer. 16 Waiting period The employer selects the waiting period, which is the period of time that must pass between an employee s hire date and the date the employee is eligible to enroll or decline to participate in the employer s benefit plan. Anthem will offer the following waiting-period options: First of the month following the date of hire First of the month following one month from the date of hire, not to exceed 60 days. If it exceeds 60 days, Anthem will make the subscriber effective the first of the month following the date of hire. Note: Existing small groups with waiting periods in excess of 60 days will be mapped to the first of the month following one month from the date of hire. 17 Takeover provisions 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 60 days from the date of discontinuance of a prior contract or policy providing such hospital, medical or surgical expense or service benefits will 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 (b) of Section 1399.62, or pursuant to subdivision (d) of Section 10128.2 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. 10
18 Prior deductible credit/annual maximum copay/dental benefit waiting period credit a. For new group submissions, Anthem Blue Cross provides credit for deductibles met under prior takeover group medical or prior takeover group dental coverage if proof of the actual dollar amount is submitted with the first claim. This provision does not apply to new hires. b. Credit for a pharmacy deductible is not available, except when the member s prior takeover group coverage was an Aggregate plan (e.g., HSA). c. Credit for the annual maximum copay is not available, except when the takeover group is moving from Anthem Large Group coverage. d. Anthem Blue Cross provides credit for the dental benefit waiting periods if Anthem Blue Cross receives proof of 12 months of prior creditable dental coverage at enrollment and there is no lapse in coverage between carriers. 19. Eligible dependents An eligible employee may be required to provide proof of dependency. Dependent coverage is available to the following: a. Lawful spouse b. Registered domestic partner c. Disabled dependent child, who at the time of becoming age 26, is, incapable of self-sustaining employment by reason of a physically or mentally disabling injury, illness or condition, and is chiefly dependent on the subscriber for support and maintenance (A disabled dependent may be eligible for benefits beyond his or her 26th birthday.) d. An employee s, spouse s or registered domestic partner s child under age 26 - Natural child - Newborn child - Stepchild - Legally adopted child - Ward of legal guardian - Child for whom the Eligible Employee has assumed a parent-child relationship (does not include foster children), as indicated by intentional assumption of parental status or assumption of parental duties by the Eligible Employee* (*as certified by the employee or annuitant at the time of enrollment of the child, and annually thereafter) 20 Federal regulations a. Federal TEFRA, DEFRA and COBRA legislation has been enacted to regulate employee health care coverage. Based on this legislation and the limitations of the Anthem Blue Cross agreement, if a business employs, on average, fewer than 20 employees in a year and any employee becomes age 65, the employee s primary carrier must be Medicare. For these employees who are 65 years old and choose to retain their Anthem Blue Cross Small Group coverage, Anthem Blue Cross will apply contract benefits as a secondary carrier for Medicare benefits paid or payable. b. If a member is covered by both Medicare and an Anthem Blue Cross contract, and Anthem Blue Cross is secondary to Medicare, the Medicare payment is calculated first and Anthem Blue Cross coordinates up to 100% of coverage for deductibles and coinsurance not to exceed the Anthem Blue Cross benefit. 11
Section 2 General underwriting guidelines for new business (cont.) - If a member is required to pay an additional premium for any part of Medicare and chooses not to enroll in that part, Anthem Blue Cross will pay per contract benefits as primary. - If a member is eligible for any part of Medicare that is premium-free and chooses not to enroll in that part, Medicare would be considered primary and the member s Anthem Blue Cross plan would be secondary. Anthem Blue Cross will estimate Medicare s benefit prior to Anthem Blue Cross coordinating coverage for deductibles and coinsurance. c. Anthem Blue Cross is secondary to Medicare when the following criteria are met: - The employer has fewer than 20 employees and the member is age 65. - Members under 65 are eligible for Medicare due to a disability. - Members are enrolled following the first 30 months of kidney dialysis treatments for end-stage renal disease. d. COBRA: Participation in the employee 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 employ 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 Cal-COBRA (SB719) took effect January 1, 1998. This legislation provides for the continuation of coverage for employees and eligible dependents of qualifying groups with 2 19 employees. Under California law AB1401, Cal-COBRA provides continuation of coverage for groups of 2 19 eligible employees for at least 50% of the working days in the previous calendar year. Groups of one employee are not eligible for Cal-COBRA. An employee and/or his or her eligible dependents are eligible for continuation of coverage under Cal-COBRA for up to 36 months (if they were enrolled in Cal-COBRA on or after January 1, 2003), if coverage was terminated due to any of the following qualifying events: a. Death of the plan subscriber (continuation for dependents) b. Employee s termination of employment or reduction in hours c. Spouse s divorce or legal separation from the subscriber d. Loss of eligible dependent status of an enrolled child e. Subscriber becoming entitled to Medicare f. Loss of eligible status of enrolled family member Anthem Blue Cross is currently administering Cal-COBRA. However, brokers and agents are responsible for submitting Cal-COBRA questionnaires, applications and remittance checks with new business. NOTE: Cal-COBRA rates are 110% of the group rate. Effective January 1, 2008, AB910 amended existing law to extend the continuation of coverage rights for over-age dependents who are: 1) incapable of self-sustaining employment by reason of physically or mentally disabling injury, illness or condition; and 2) chiefly dependent on the subscriber for support and maintenance. The law sets out new notification timelines, and requires subsequent health care service plans and health insurers to honor continued coverage unless there is a demonstration that the child no longer meets eligibility requirements. 12
Section 3 California underwriting business requirements 1 Sole Proprietors 2. Corporations A sole proprietor employer must employ at least one common law employee as anyone who performs services for an employer that controls what will be done and how it will be done as defined by IRS Guidelines. A Sole Proprietor will need to provide all of the following: a. A California Business License or Fictitious Business Name Filing b. Anthem Blue Cross Eligibility Statement c. Quarterly State Tax Withholding Report, if available, or payroll records for six weeks d. If the owner is not listed showing wages on the Quarterly State Tax Withholding Report, the group will also need to provide: Current Schedule C or a Schedule F for Farms (If this is not available due to the length of time in business or because there is an extension to file, a California Business License or Fictitious Business Name filing may be substituted.) A corporation will need to provide all of the following: a. Statement of Information or corporate meeting minutes (listing names of all officers) may be considered b. Anthem Blue Cross Eligibility Statement c. Quarterly State Tax Withholding Report, if available, or payroll records for six weeks Corporations established out of the state will also need to provide a Certificate of Qualification in addition to the above documentation. If the percentage of ownership is 0, the enrolling Corporate Officer must appear on the Quarterly State Tax Withholding Report. 13
Section 3 California underwriting business requirements (cont.) 3 Partnerships 4 Limited Partnership (LP) A partnership will need to provide all of the following: a. Partnership Agreement and Federal Tax ID appointment letter may be required b. Anthem Blue Cross Eligibility Statement c. Quarterly State Tax Withholding Report, if available, or payroll records for six weeks d. If partners are not listed showing wages on the Quarterly State Tax Withholding Report, the group will also need to provide: Current Schedule K 1 (If this is not available due to the length of time in business or because there is an extension to file, a Partnership Agreement and Federal Tax ID appointment letter may be substituted.) A Limited Partnership will need to provide all of the following: a. Partnership Agreement and Federal Tax ID appointment letter may be required b. Anthem Blue Cross Eligibility Statement c. Quarterly State Tax Withholding Report, if available, or payroll records for six weeks d. If General Partners are not listed showing wages on the Quarterly State Tax Withholding Report, the group will also need to provide the following: Current Schedule K 1 (If this is not available due to the length of time in business or because there is an extension to file, a Partnership Agreement and Federal Tax ID appointment letter may be substituted.) Limited Partnerships established out of state will also require a Foreign Limited Partnership Application for Registration (Form #LP-5) filed and stamped by the California Secretary of State. 14
5 Limited Liability Partnership (LLP) A Limited Liability Partnership (LLP) will need to provide all of the following: a. Partnership Agreement and Federal Tax ID appointment letter may be required b. Anthem Blue Cross Eligibility Statement c. Quarterly State Tax Withholding Report, if available, or payroll records for six weeks. d. If partners are not listed showing wages on the Quarterly State Tax Withholding Report, the group will also need to provide the following: Current Schedule K 1 (If this is not available due to the length of time in business or because there is an extension to file, a Partnership Agreement and Federal Tax ID appointment letter may be substituted.) Limited Liability Partnerships established out of state will also require a Registered Limited Liability Partnership Certificate of Registration filed and stamped by the California Secretary of State. 6 Limited Liability Company (LLC) A Limited Liability Company (LLC) will need to provide all of the following: a. Articles of Organization with Operating Agreement or b. Statement of Information c. Anthem Blue Cross Eligibility Statement d. Quarterly State Tax Withholding Report, if available, or payroll records for six weeks. e. If managing members are not listed showing wages on the Quarterly State Tax Withholding Report, the group will also need to provide all of the following: Current Schedule K 1 (If this is not available due to the length of time in business or because there is an extension to file, a Statement of Information or Articles of Organization with Operating Agreement may be substituted.) Limited Liability Companies established out of state will also need to provide a Limited Liability Company Application of Registration filed and stamped by the California Secretary of State. A Single Member LLC or Disregarded Entity will be considered to have one owner. 7 Start-up Group A start-up group must meet all SG requirements, except for the length of time in business. Start-up groups must have been in business for at least six weeks and be supported by payroll records. 15
Section 3 California underwriting business requirements (cont.) 8 Professional Employer Organization (PEO) The group must be actively engaged in a business or service On at least 50% of its working days during the previous calendar quarter or calendar year, group employed at least one, but not more than 50, eligible employees, the majority of whom were employed within this state The group was not formed primarily for purposes of buying health care plan A bona fide employer-employee relationship exists. Group must provide a copy of PEO client invoice billed to the worksite business, which includes names of each employee previously leased to the worksite employer. Group must provide a W4 for all employees. 9 Union versus Nonunion The group must be actively engaged in a business or service On at least 50% of its working days during the previous calendar quarter or calendar year, group employed at least one, but not more than 50, eligible employees, the majority of whom were employed within this state The group was not formed primarily for purposes of buying health care plan A bona fide employer-employee relationship exists. A copy of the Union Roster will be required from the employer identifying Union members. Note: Groups that exceed 50 employees (combined number of union and non-union employees) may be considered for large group. 10 Churches The group must be actively engaged in a business or service On at least 50% of its working days during the previous calendar quarter or calendar year, group employed at least one, but not more than 50, eligible employees, the majority of whom were employed within this state The group was not formed primarily for purposes of buying health care plan A bona fide employer-employee relationship exists. Members of the clergy who do not appear on the Quarterly State Tax Withholding report should submit a Schedule SE or Form 4361 with IRS approval. 11 Households The group must be actively engaged in a business or service On at least 50% of its working days during the previous calendar quarter or calendar year, group employed at least one, but not more than 50, eligible employees, the majority of whom were employed within this state The group was not formed primarily for purposes of buying health care plan A bona fide employer-employee relationship exists. File a Quarterly State Tax Withholding report Note: Private household employers who pay annual, rather than quarterly, withholdings will not be eligible. 16
Section 4 General underwriting guidelines for existing business 1 Qualifying Event enrollment period An employee and/or qualified dependent(s) who previously declined coverage may enroll at the group s anniversary date or upon a Qualifying Event. A Qualifying Event enrollment period is defined under Section 5, page 20, Definitions. 2 Contract benefit modifications Group level: The required documentation must be complete and accurate to process the request. The completed documentation, including all necessary Anthem Blue Cross forms, must be received by Anthem Blue Cross within 30 days of the requested anniversary date. Nonanniversary benefit modifications will not be accepted. Please refer to the Benefit Modification Job Aid (page 18) to determine when each type of benefit modification may be requested and which documents must accompany your request. The following criteria also apply to group-level contract benefit modifications: a. Only one medical benefit modification will be allowed in a 12-month period. b. Increases in Life benefits may be subject to Underwriting approval. c. Changes in products, portfolios or programs do not constitute a new rate and benefit guarantee period. d. The rate guarantee for dental and/or vision coverage that is added to an existing Medical policy will default to the medical rate guarantee after the initial rate guarantee is exhausted. No rate guarantee will be applied to Life policies added to an existing Medical policy. e. Completed paperwork from groups requesting a benefit modification should be received by the underwriter within 30 days of the requested effective date. f. Existing groups can only change their employer contribution approach once in a 12-month period, subject to underwriting approval. g. Changes in the anniversary date are not allowed. h. Anthem Blue Cross must be notified of changes in company name, ownership or tax ID number. These changes are subject to underwriting review. Note: Your group benefit agreement is not assignable or transferable and it may not, among other things, be transferred as part of a sale of the assets of the business. These changes are subject to underwriting review. Subscriber level: a. Covered subscribers may move to a different product offered by their group at the anniversary month of the group s original effective date. b. A subscriber can request a change in medical benefits by submitting a letter from the group on company letterhead explaining the request to change or by completing the Plan Change Request form on the anniversary date. 17
Section 4 General underwriting guidelines for existing business (cont.) Benefit Modification Job Aid Benefit Modification When Eligible Documents Necessary Adding a plan or downgrading a plan Excluding Dental Prime and At a group s anniversary only 1. Letter from the group or renewal documents, if available Complete Plans 2. Add-On/Change of Coverage Applications for employees, may be required 3. Statement of Understanding* subject to regulatory Adding Life Insurance or Increasing Existing Coverage The following amounts are Guaranteed Issue: $30,000 for 2-9 enrolled $50,000 for 10-24 enrolled $100,000 for 25-50 enrolled Coverage amounts over Guaranteed issue (GI) are subject to underwriting approval. 18 First of the month following receipt of all documentation Add Dental, Vision or Voluntary Dental and First of the month Vision plans following receipt of all Cancelled Blue View vision coverage can documentation only be re-added at Anniversary date. Excluding Dental Prime and Complete Plans Add Part-Time Employee Eligibility At a group s anniversary (Refer to Section 2 number 2) only Change Contribution Option Group Demographic Change (Ownership change, split, merger or acquisition) Add Workers Compensation Plan approval. 1. Letter from the group, including contribution and desired life amount or renewal documents, if available 2. Employee Applications will be needed for any new enrollments who are not currently enrolled, or renewal documents, if available. Employee Applications may be required to underwrite coverage amounts over Guaranteed Issue. 3. If 10 or more are enrolling, the SIC code will be required. 1. Letter from the group indicating plan selections and contribution amount 2. Employee Applications or renewal documents, if available 1. Letter from the group 2. 1-50 Small Group Employee Application(s), requesting or declining coverage for all eligible part-time employees 3. Employer Application may be required 4. Current Quarterly State Tax Withholding Report 5. Statement of Understanding* subject to regulatory approval. Once in a 12-month period 1. Letter from the group First of the month Group name change with no new Tax ID number: following receipt of all documentation First of the month following receipt of all documentation 1. Letter from the group on company letterhead requesting the name change. 2. Fictitious Business Name Filing (Sole Proprietorship or Partnership), or amended Articles of Incorporation (Corporation) or amended Articles of Organization (Limited Liability Corporation [LLC]). Group name change with new Tax ID number: 1. A letter from the group on company letterhead requesting the name change. 2. New Employer Application. 3. Legal company documentation. Please note: Additional documentation and review may be required. Contact Employers Workers Compensation Insurance Specialists at 888-682-6671. *Changes initiated by Anthem Blue Cross to both medical rates and benefits can be made with 60 days notification prior to the anniversary date.
Section 5 Definitions 1 Late enrollee A late enrollee is an eligible employee or dependent who has declined enrollment in a health benefit plan offered by a small employer at the time of the initial enrollment period provided under the terms of the health benefit plan, and who subsequently requests enrollment in a health plan of that small employer, except where the employee or dependent qualifies for a special enrollment period provided that the initial enrollment period will be a period of at least 30 days. Late enrollees may be subject to a 12-month waiting period and an effective date on the first of the month following receipt of the application. 2 Guaranteed association means a nonprofit organization comprised of a group of individuals or employers who associate based solely on participation in a specified profession or industry, accepting for membership any individual or employer meeting its membership criteria, and that (1) includes one or more small employers as defined in subparagraph (A) of paragraph (1) of subdivision (k) of Health and Safety code 1357.500; (2) does not condition membership directly or indirectly on the health or claims history of any person; (3) uses membership dues solely for and in consideration of the membership and membership benefits, except that the amount of the dues will not depend on whether the member applies for or purchases insurance offered to the association; (4) is organized and maintained in good faith for purposes unrelated to insurance; (5) was in active existence on January 1, 1992, and for at least five years prior to that date; (6) has included health insurance as a membership benefit for at least five years prior to January 1, 1992; (7) has a constitution and bylaws, or other analogous governing documents, that provide for election of the governing board of the association by its members; (8) offers any plan contract that is purchased to all individual members and employer members in this state; (9) includes any member choosing to enroll in the plan contracts offered to the association provided that the member has agreed to make the required premium payments; and (10) covers at least 1,000 persons with the health care service plan with which it contracts. The requirement of 1,000 persons may be met if component chapters of a statewide association contracting separately with the same carrier cover at least 1,000 persons in the aggregate. 19