Uninsured  - Commonly Asked Questions & Answers:

How many employees qualify as a “group?” Typically, a minimum of 2 employees or 75% of the eligible employees, that do not have other coverage, whichever is more.  However, some programs will allow as little at 60% participation.

I am a sole proprietor -- Do I qualify for “group” coverage? If you have one additional employee (on payroll) for more than 50% of the last calendar year quarter, yes you do.

I have a partnership/corporation, but neither of us draws regular “paychecks”… Do we qualify for group benefits? It is very possible, as long as you have had at least 2 partners or officers of the corporation for more than 50% of the last calendar quarter.

What is the minimum amount employers must contribute toward the cost of premium for their employees? The general rule is 50% of the employee’s premium, however there are carriers that require 75%.  There are some limited benefit plans that can be as inexpensive as $25 per month employer contribution.

Do my employees have to contribute toward the premium? No, however the growing trend is to have the employees engaged in the cost of insurance.

What are the tax benefits of group medical plans? The entire premium that the Employer pays is 100% deductible as a business expense.

Can my employees get better rates if they go out on their own and buy individual insurance? Individual plans can be less expensive at times because they underwrite individually, and can deny anyone based on health conditions.  So, it is not “guarantee issue” like group products are.  The benefits are quite different as well.

What are the choices of Insurance companies that I have here in SLO? Blue Cross, Blue Shield, Pacificare/United & Aetna are the primary “small group” products available recently.

What is the cutoff between small and large group? A small group is between 2-49 employees, a large group is 50+.

Can my employees be denied coverage in a “group” policy? For groups 2-49 employees, as long as all the “group” criteria are met, then a carrier cannot deny any employee coverage, no matter what medical condition they are picking up.

Do I have a 1 year contract with my insurance carrier? Some carriers rates are only guaranteed for 6 months at a time, however most are guaranteed for 1 year.  You can always move away from a carrier to another carrier at anytime (mid year) as it is a month to month agreement.

Are my rates based on my group size or health conditions? Both.  If you are a group between 2-49 employees, a carrier can either raise or lower your rates 10% based on the size & health of your group.

Can I get better rates by shopping on-line, without an Agent/ Broker? No, the rates and plans are identical online as they are in an Agent’s office

Why do I need an Agent/Broker? An Agent/Broker should be marketing your group for you at least on an annual bases making sure you are still with the right carrier/plan.   As well as performing other duties such as helping with administration, materials, claim problems, provider issues, COBRA issues, enrollment meetings, & employee education. Link to SLO Chamber Agent/Broker listing

Why can’t I join an association and buy a better/cheaper plan through them? Assembly bill 1672 requires that there be an “Employer/Employee” relationship.  This is usually proven though payroll, Articles of Inc, or partnership paperwork.  Independent contractors are not eligible employees.

Can I have employees on different plans? Most carriers will allow small groups to offer different plan options. However, you need to be careful not to discriminate.

Can I have different contributions/benefits for different “classes” of employees? Yes, as long as you do not discriminate within the classes.

What do I need to do to get started? Contact a local agent/broker and have them obtain quotes from all the carriers.  They will need a current “census” of your eligible employees (name, age, dependent status).  Link to Census

What do I need to submit to the carriers to get approved? Enrollment forms, contract, check to the carrier for the first month’s premium, a copy of your last quarter’s wage & withholding report (or Articles of Inc.)

How long does it take to get approved? If all the paperwork is in order, it only takes a few days.