TO: CAREFIRST DISTRIBUTORS

Transcription

1 TO: CAREFIRST DISTRIBUTORS This Small Employer Group Eligibility Manual was developed to educate and assist you in selling all CareFirst BlueCross BlueShield (CareFirst) and CareFirst BlueChoice, Inc. (CareFirst BlueChoice) products sold in the District of Columbia (DC), Virginia (VA) and Maryland (non- Maryland Small Group Reform). This manual should be referenced, on an ongoing basis to assist you in both new business and renewal sales. This manual was originally released in September 1997 and has been revised to include many new sections and to incorporate the guidelines associated with all of our small group products for DC, VA and MD (non-msgr). We hope that the additional information will be of value, and will help facilitate more efficient writing of both new business and renewal sales. CareFirst has implemented several internal changes regarding our small group product portfolio and rating practices. To further assist you in your new business and renewal sales, we have added a section of Small Group Legislative Highlights. We are sure that you will find this section informative in helping you to better serve your clients. Every effort has been made to ensure that the information is complete and accurate. The information in this manual is based on CareFirst s interpretation of DC/VA small group legislation in addition to CareFirst s Sales and Underwriting policies and guidelines. This manual is updated annually, in the fourth quarter of the year. However, interpretations, policies and guidelines may be modified at the discretion of CareFirst at any time during the year. Changes will be communicated as deemed appropriate through the current Sales Flash notification system. We believe that the information here will provide you with the basics to successfully prospect, sell, and retain any small group account in DC, VA and MD (non-msgr). Please review all sections carefully, as our guidelines will vary, based on the product sold. As our appointed and contracted Distributors, your continued support and adherence to our policies and guidelines is appreciated. Any questions regarding the information contained within this manual should be directed to your assigned General Producer (GP) formerly Wholesaler Full-Service Producer (FSP) formerly Administrator/DBE / or your CareFirst Broker Representative. 1

2 Table of Contents If you are viewing this file on line (PDF format), BOOKMARKS have been added which link to the page being referenced. Click on the BOOKMARKS tab in the left-hand navigator pane to view. Click the plus sign (+) to expand sub-categories. Click the topic to be linked to the page referenced. Highlights of DC and VA Small Group Legislation 3-4 CareFirst Product Offerings 4 Defined Geographic Regions 5 Doing Business with CareFirst 5-6 Keeping You Informed 6-7 Connecting with CareFirst 7-9 Calendar Year/Contract Year 9 Deductible Credit 9-10 Deductible Carryover 10 PAGE(S) Employee Eligibility Enrolling Eligible Employees and Dependents Account Eligibility Multiple Option Offerings Affiliated Companies 19 Account Eligibility Verification 20 Tax Documentation 21 Husband/Wife Businesses 22 Special Product Offerings 22 New Business 23 Requesting a Quote 24 Medical Underwriting Guidelines New Group Paperwork Renewal Business Matrix: Eligibility, Rating & Participation 30 Medicare Matrix: Eligibility, Rating & Participation 31 Medicare Eligibles/Dependents and Retirees Continuation of Coverage COBRA 35 Conversion 35 Regional Dental Benefits Regional Vision Benefits 40 2

3 HIGHLIGHTS OF SMALL GROUP LEGISLATION District of Columbia The District of Columbia has provisions under the DC Health Insurance Portability and Accountability statute (DC Official Code, et seq.) that specifically apply to small employer groups. (1) Any portion of the premiums or benefits is paid by or on behalf of the employer; (2) The eligible employee or dependent is reimbursed, whether through wage adjustments or otherwise, by or on behalf of the employer, for any portion of the premium; or (3) The health benefit plan is treated by the employer or any of the covered individuals as part of a plan or program for the purpose of Section 106, 125, or SearchTerm5162 of the United States Internal Revenue. Virginia In 1992, the State of Virginia enacted the Virginia Small Employers (VASE) Legislation. The intent of the legislation was to ensure that all insurance carriers doing business in Virginia offer health coverage to the 2-50 market segment without the enrollment and health restrictions that usually apply to the small group market segment. Carriers in the small group market (2-50 full-time employees) may not exclude or limit coverage for pre-existing conditions beyond 12 months from the effective date of coverage. In determining whether a pre-existing condition applies, all coverage shall credit the time the person was covered under previous group or non-group coverage of equal or greater value if the previous coverage was continuous to a date not more than 30 days prior to the effective date of new coverage. Crediting prior coverage does not apply to open enrollment contracts until such time as all carriers in the small group market are required to guarantee issue policies in the small group market. Coverage must be guaranteed renewable and the entire group must be accepted. VASE has several components. However, a piece of the legislation passed in 1993 split the small group market in Virginia into two segments: the small employer, consisting of 2-99 (14VAC ) employees and the primary small employer, a subset of the small employer, consisting of 2-25 employees. A part of the legislation also guaranteed the issuance of coverage to the 2-25 market segment. The Virginia Essential and Standard (VA E&S) Benefit Plans are a component of the VASE legislation, effective November 1, The Plans target only the 2-25 market segment and require that insurers make available two specific health care designs of minimal coverage to the primary small employer of 2-25 eligible employees. An eligible employee is defined as an employee who works full time, has a normal work week of 30 or more hours, has satisfied applicable waiting period requirements, and is not a part time, temporary or substitute employee. Every health insurance issuer offering group health insurance coverage shall, as a condition of transacting business in Virginia with small employers, offer and make available to small employers an essential and a standard health benefit plan, subject to the provisions of

4 VA HB1075 (Effective 7/1/1998) Virginia law requires every Health Maintenance Organization (HMO) when offering a health plan to a group contract holder to provide or include a point-of-service (POS) benefit as an additional benefit for the enrollee, at the enrollee s option, individually to accept or reject. In connection with its group enrollment form, HMOs must make available to the prospective group contract holder and to all prospective enrollees, in advance of the initial enrollment and each re-enrollment, a notice, approved by the Commissioner, which completely and accurately explains to the group contract holder and prospective enrollee the point-of-service benefit and permits each enrollee to make his or her election. Virginia approved point of service offerings include CareFirst BlueChoice Opt-Out Open Access, BlueChoice Advantage and BluePreferred. CareFirst BlueChoice Opt-Out Plus Open Access does not meet the requirements of VA HB1075. ( , ). Each enrollee completes an enrollment form and a Pointof-Service Selection form. The enrollee individually accepts or rejects the POS options on the POS form. CAREFIRST PRODUCT OFFERINGS CareFirst, Inc. is made-up of several subsidiaries that are licensed separately and as such are viewed as separate carriers by the Insurance Divisions. However, for new sales bonus and Broker of Record transfer requirement purposes, any business in these subsidiaries is considered existing CareFirst business. Various products are offered through each CareFirst carrier as shown in the chart below: Group Hospitalization and Medical Services, Inc. (GHMSI) BluePreferred PPO Regional Traditional Dental Regional Preferred Dental BlueVision BlueVision Plus BlueFund Virginia Essential & Standard CareFirst BlueChoice, Inc. BlueChoice HMO BlueChoice HMO Open Access BlueChoice HMO Opt-Out Open Access BlueChoice Opt-Out Plus Open Access BlueChoice Advantage Regional DHMO Dental Regional Traditional Dental Regional Preferred Dental BlueVision BlueVision Plus Virginia Essential & Standard Please note product combination guidelines discussed throughout this manual, as some products cannot be offered in combination with others. 4

5 DEFINED GEOGRAPHIC REGIONS CareFirst Marketing Service Area District of Columbia, Maryland and the Commonwealth of Virginia, the cities of Alexandria and Falls Church, the counties of Arlington and the portion of Fairfax east of Route 123 including the incorporated limits of Fairfax City and the town of Vienna in their entirety. (Helpful hint: use the BCBS website ( to determine the appropriate BlueCross BlueShield plan.) The Zip Codes that are split by Route 123 are (refer to map): o Fairfax County: 22030, 22039, 22079, 22101, 22102, 22124, 22180, 22181, 22182, 22191, o Prince William County: 22125, 22191, DOING BUSINESS WITH CAREFIRST CareFirst products are sold through brokers who are contracted with us directly and /or through a General Producer (GP) / Full-Service Producer (FSP). It is important for all distributors selling CareFirst products to understand their role in the sales process in order to efficiently service our members. Please use the following details as a guideline for selling CareFirst products: The role of the General Producer (GP): Establish and maintain compliance with all regulatory requirements Assist with contracting and appointment of brokers. Provide brokers with rate quotes for new groups and alternative options for existing groups. Gather all paperwork required for new group enrollment, benefit changes and renewals. Provide brokers with marketing/sales materials and literature. Distribute renewals to brokers and groups. Send complete and accurate paperwork to CareFirst by the deadlines established in the Account Installation (AI) Calendar (Broker/Agent Administrative Manual). Assist brokers with benefits and eligibility questions. Assist with customer service, enrollment and billing issues. Distribute CareFirst Broker Sales Flashes to their brokers. The General Producer (GP) is also responsible for educating brokers and their staff on the requirements for new group and benefit change submissions. In addition, the General Producer is expected to hold broker training sessions on CareFirst products, enrollment eligibility requirements and other important topics. CareFirst Representatives also attend these sessions to assist and answer questions. The role of the CareFirst Broker Sales Representative is to educate the General Producer and their staff on CareFirst products and procedures. In addition, CareFirst Representatives work directly with brokers who have not selected a General Producer to instruct them on new group rate quotes and renewals. 5

6 DOING BUSINESS WITH CAREFIRST (cont d) The role of the Full-Service Producer (FSP): Establish and maintain compliance with all regulatory requirements Assist with contracting and appointment of brokers. Provide brokers with rate quotes for new groups and alternative options for existing groups. Gather all paperwork required for new group enrollment, benefit changes and renewals. Provide brokers with marketing/sales materials and literature. Distribute renewals to brokers and groups. Send complete and accurate paperwork to CareFirst by the deadlines established in the Account Installation Calendar (Broker/Agent Administrative Manual). Assist brokers with benefits and eligibility questions. Distribute CareFirst Broker Sales Flashes to their brokers. Bill and collect premiums for groups. Send termination notices to groups and brokers. Update and maintain enrollment records, servicing accounts/ members regarding billing, enrollment and customer service issues. The CareFirst Broker Sales Representative is responsible for assisting the Full-Service Producer with broker training sessions. In addition, they are responsible for training and educating the Full-Service Producer on all changes and updates related to doing business with CareFirst. The role of the CareFirst Representative for the Direct Broker is: Establish and maintain compliance with all regulatory requirements Provide training on CareFirst Products and policies. Provide training on the CareFirst rating system. Assist in new sales and renewals. Assist with enrollment meetings (groups with 25 or more enrollees). Provide materials necessary to sell and renew CareFirst Products. Provide quotes for new and existing business. Maintain a positive relationship with all brokers. Process all paperwork for new business and renewals. Update files on group level for any changes such as group name, address, etc. Assist with benefit and eligibility questions. KEEPING YOU INFORMED CareFirst BlueCross BlueShield strives to keep our broker community informed. Timely updates result in better service to our accounts and members. Information and product updates are available as described below. Broker Sales Flash The CareFirst Sales Flash covers a variety of sales-related topics including product updates, administrative matters, application and form changes, among many other subjects. The Sales Flash is market-specific and is distributed on a weekly basis via . In addition, Sales Flashes are available on General/Full Service Producers are responsible for providing brokers with this information. Direct Brokers can contact their Broker Sales Representative to be added to the distribution list to receive the Sales Flash directly from CareFirst. 6

7 KEEPING YOU INFORMED (cont d) Broker Forums Broker forums are held to keep brokers informed of CareFirst product initiatives and enhancements, pricing updates and other sales related information. These forums are generally held on an annual basis and brokers are notified in advance by invitation. Broker Council The CareFirst Broker Council is comprised of approximately twenty experienced health insurance brokers representing Maryland, DC and Northern Virginia. New members are appointed to the Council each year. The Council meets quarterly and provides the opportunity for members of the Council to discuss issues and concerns in the broker community. The Broker Council represents CareFirst s entire distributor networks. We strongly encourage brokers to contact any member of the Broker Council with any questions, comments or concerns. To request a copy of the list of Council members, please contact your Broker Sales Representative. CONNECTING WITH CAREFIRST General Producer(s) (GP), Full-Service Producer(s) (FSP) or Direct Brokers doing business with our DC location, may contact our Sales Associates at or toll-free at The DC RightFax number is and the department s address is: brokersales4@carefirst.com. Brokers working with a General/Full-Service Producer should not use this address or RightFax number; instead, they should contact their General/ Full-Service Producer directly. As part of the workflow process, please send the following requests to the above-stated DC RightFax number or address: Signed renewals Request for alternative quotes (Direct Brokers Only) Benefit changes Health prospect quotes (only for Direct Brokers who do not have access to Broker Express) Benefit booklet & group contract requests for existing groups (please allow 6-8 weeks for shipment) Group updates (i.e. address change, group administrator, enrollment eligibility) Group cancellation letters Fort Dearborn Life Insurance Prospect quotes and enrollment material can be obtained online at 7

8 CONNECTING WITH CAREFIRST (cont d) FOR CLAIMS AND BENEFIT INQUIRIES Broker Service Unit: (202) (800) Consumer Driven Health (CDH): OR (option 3) BILLING ENROLLMENT AND ID CARD INQUIRIES Group Enrollment: (202) Group Enrollment Fax: (301) Billing & Collections (Invoices) (202) BLUEPREFERRED MEMBER SERVICES Monday-Friday 7:00am - 7:00pm; Saturday 8:00am - 1:00pm Toll Free (800) TTY (202) Pre-Authorization (866) When writing to CareFirst BlueCross BlueShield, always include the Member Identification Number and group number. Please address your correspondence to: CareFirst BlueCross BlueShield P.O. Box Lexington, KY BLUECHOICE MEMBER SERVICES Monday-Friday 7:00am - 7:00pm; Saturday 8:00am - 1:00pm Toll Free (866) TTY (800) Pre-Authorization (866) When writing to CareFirst BlueCross BlueShield, always include the Member Identification Number and group number. Please address your correspondence to: CareFirst BlueCross BlueShield P.O. Box Lexington, KY ADDITIONAL CONTACTS BlueVision (Davis Vision) (800) FirstHelp (24 hour Emergency Assistance) (800) ARGUS (Rx Services) (800) Dental Benefits (866) CareFirst Switchboard (DC location) (202) National Capital Insurance Agency (Life & Disability) (202) Commission Information / Broker Accounting Group (410) Individual (410) Broker Contracting and Compliance (410) BlueCard Provider Information (800) 810-BLUE (2583) Magellan Mental Health Services (800)

9 CONNECTING WITH CAREFIRST (cont d) MY ACCOUNT Members have the capability to check the status of their medical claims history, covered members, eligibility, benefits and questions to customer service through My Account located in the Members & Visitors section of Members will need their ID number or SSN to register for My Account. CALENDAR/CONTRACT YEAR BENEFIT PERIOD Effective February 1, 2008, new and renewing business will have the option to set up benefits on either a contract or calendar year basis. Additionally, this means that existing group business, currently on a calendar year, can move to contract year benefit period upon renewal or vice versa. (New business quotes default to contract year unless calendar year is requested. Renewal quotes default to the group s current benefit period.) Exceptions Contract year benefits are available only to groups that enroll with an effective date on the first of the month. Business sold with the 15 th of the month effective date will continue to have benefits available ONLY on a calendar year basis. Groups may only convert to contract year upon renewal. Virginia Small Group Essential and Standard (VA E & S) products will have a calendar year benefit period only. Contract year benefits are not available. These products are not available as Point of Enrollment (POE) and cannot be sold with any other Blue Selection medical options. Please note: Under the calendar year benefit period, the deductible and maximums reset each year on January 1 even if the group changes its benefits upon renewal during the year. DEDUCTIBLE CREDIT CareFirst BlueCross BlueShield has implemented the following changes to the business rules around Deductible Credit. The following is currently in effect for groups in the market for CDH Products and Blue Selections that include a CDH product: Deductible Credit For New Business o For 15th of the month - no deductible credit and remains calendar year for now o Contract Year - no deductible credit o Calendar Year (except for 15 th of the month effective dates) provide deductible credit as long as they are currently in a calendar year plan with the competitor. This ensures that we are not extending their deductible period longer than 12 months, thus making the plan out of compliance with the IRS. Deductible Credit for Renewals o Off-cycle renewals - no deductible credit for contract year; deductible credit DOES apply for calendar year o Moving from calendar year to contract year or vice versa - no deductible credit o Remaining on calendar year but changing benefits on renewal - deductible credit applies 9

10 DEDUCTIBLE CREDIT (cont d) The following business rules have been in effect for Non-CDH Products sold as standalone or not offered with CDH as part of Blue Selections: Medical Deductible and Out of Pocket Credit is available: o For new business - Manual Process o For existing business - Within same benefit period (automated on FLEXX) o Deductible credit (CDH) expected on existing CareFirst accounts changing to new benefit effective periods Manual process when a group changes benefit effective periods Rx Deductible Credit is not a CareFirst business or industry practice Please refer to the following charts that outline the business rules for both new and renewing business. New Deductible Credit Business Rules New Groups Before 2/1/08 After 2/1/08 Calendar Yes Yes* Contract Yes No 15th of Month (Calendar)+ Yes Renewing Group Before 2/1/08 After 2/1/08 Off Cycle Change Yes Calendar YES Contract - No Moving Calendar to Contract (vise versa) Yes No Remaining Calendar Year changing benefits Yes Yes * Must currently be calendar year plan with competitor -- ensures we are not extending their deductible period longer than 12 months, thus making the plan out of compliance with the IRS + 15th of the Month Contract Year Not Available Non-CDH Products sold stand alone or not offered with CDH as part of Blue Selections: Existing Deductible Credit Rules Apply When a CDH Product is offered standalone or as part of Blue Selections, Deductible Credit is ONLY ALLOWED on Calendar Year New or Renewing Business DEDUCTIBLE CARRYOVER Deductible carryover is a provision that allows covered charges incurred by the participant and applied to the deductible during the last three months of one year to be applied to the following year. It is available at an additional cost as a benefit enhancement to all medical options except for HRA/HSA and Virginia Essential & Standard. plans. In addition, it is available to all RX options that have an in network deductible and calendar year benefit period. Please note rate charts will not be available for this benefit. General/Full Service Producers will be unable to quote this benefit on their proprietary systems. No 10

11 EMPLOYEE ELIGIBILITY FOR DETERMINATION OF GROUP SIZE Employee Eligibility Requirements The following employees (and their dependents) are eligible for coverage, as long as they meet the additional eligibility requirements set forth in the Certificate of Coverage or Group Enrollment Agreement, and any attachments thereto. All employees (including owners and partners) who are regularly employed on a full-time basis working at least 30 hours a week. (Seasonal employees, subcontractors, consultants or other persons issued 1099 s by the Group are not eligible.) All former employees and their dependents whose eligibility for group coverage has been extended due to COBRA requirements. Note: No individual is eligible under your Group coverage both as a Subscriber and as a Dependent. If your Group employs both a husband and wife (or Domestic Partner, if applicable), they may not both have Individual + Adult Coverage or Family Coverage. TEFRA vs. Non-TEFRA TEFRA only applies to a group health plan sponsored by or contributed to by an employer that has 20 or more employees for each working day in each of 20 or more calendar weeks in the current or preceding calendar year. Segments of employees (i.e.: union members) not eligible for plan benefits are not included in the calculation to determine TEFRA/Non-TEFRA designation. Groups should also note that there is a period of time that a group must maintain the required number of employees to actually be moved from one TEFRA/Non-TEFRA designation to another. Centers for Medicare and Medicaid Services (CMS) has put this in place to avoid groups moving between designations repeatedly. Groups are responsible for determining their designation and should enlist assistance from their accountant if there is confusion. BOARD MEMBERS Board members of accounts are not considered eligible for coverage under an employer group plan because they are not employees. TERMINATED EMPLOYEES IN COBRA ELECTION PERIOD If an employee is within their 60 day COBRA election period, they should not be included in the group census. If the employee then elects coverage, they will be provided coverage retroactive to their termination date and the group will be re-rated. 11

12 EMPLOYEE ELIGIBILITY (cont d) RETIREES, PART-TIME EMPLOYEES AND FULL-TIME EMPLOYEES WITH OTHER COVERAGE The group can elect to provide coverage for the following: Part-time employees working at least 17.5 hours a week for more than six months each year. (Those working less than these required time periods are not eligible). Retirees who have retired prior to the effective date of this coverage. (Available only if covered under the Group s prior health coverage) Proof will be required which may include a copy of prior carrier s contract and most recent billing statement. Retirees who retire on or after the effective date of this coverage. (Available only if covered under the Group s prior health coverage.) All employees who terminated employment due to disability prior to the effective date of this coverage for a period of not more than two years. If for a shorter period of time, please indicate (Available only if covered under the Group s prior health coverage.) All employees who terminated employment due to disability after the effective date of this coverage for a period of time not more than two years, If for a shorter period of time state here: (Not available for community-rated groups 2-50 contracts.) ENROLLING ELIGIBLE EMPLOYEES Eligible employees may enroll: As a new hire, after satisfying any employer waiting period During the small employers annual open enrollment period Within 31 days of lifestyle change as defined by the Health Insurance Portability & Accountability Act (HIPAA) special enrollment period; this applies to those who initially declined coverage Within 31 days of loss of spouse s employment (voluntary or involuntary) that results in loss of insurance (except gross misconduct) Within 31 days of significant change in employment status (i.e. reduction in hours) Within 31 days of the expiration of COBRA coverage BluePreferred applicants may enroll at any time after satisfying the new hire waiting period. If applying for coverage after their initial eligibility period, they are considered a late enrollee and will be subject to a 12 month waiting period for pre-existing conditions. Creditable Coverage Certificate waives the waiting period based on the length of creditable coverage satisfied provided there is not more than a 63 consecutive day break in coverage. 12

13 ENROLLING ELIGIBLE DEPENDENTS Eligible dependents may include a lawful spouse, a same sex or opposite sex domestic partner (if applicable), biological child, stepchild, legal dependent child of a domestic partner dependent, foster child or grandchild if legal custody has been appointed to the subscriber. Eligible dependents may enroll: Along with newly hired employee During small employer s annual open enrollment Within 31 days of marriage, birth, adoption, obtaining legal custody or guardianship* Within 31 days of lifestyle change as defined by the Health Insurance Portability & Accountability Act (HIPAA) special enrollment period; this does not apply to those who initially declined coverage Within 31 days of loss of employment (voluntary or involuntary) that results in loss of insurance (except gross misconduct) Within 31 days of the expiration of COBRA coverage Note: Enrolling a newborn always requires an enrollment form, even if the subscriber already has Family coverage. An elderly parent does not meet the contractual definition of a dependent; therefore he/she may NOT be enrolled on the employee s membership. *Guardianship as contractually defined according to HIPAA Primary Care Dependent (DC- Based Groups); The child must be the Subscriber s grandchild, niece or nephew; The child must be under the Subscriber s Primary Care, (Primary Care means that the subscriber provides food, clothing and shelter for the child on a regular and continuous basis during the time that the District of Columbia public schools are in regular session); and If the child s legal guardian is someone other than the Subscriber, the child s legal guardian may not be covered under an accident or sickness policy. Age limits for dependent children Unmarried dependent children are covered until the first of the month following their 23 rd birthday. Full-Time Students: Unmarried dependent students may remain eligible as long as they are enrolled as full-time students in an accredited institution and have a student certification form on file with CareFirst until the end of the month of their graduation. A full-time student is defined as a child who attends a: o public or private high school; o college or university; o graduate school; or o trade school. Attendance must meet the requirements of the institution for full-time status. If an enrolled, over-age student disenrolls from the subscriber s coverage for a period of time and wishes to re-enroll, they may be reinstated onto the subscriber s policy, providing they still meet the eligibility requirements of a full-time student dependent and are within the age limit. (A Confirmation of Enrollment Form is required) CareFirst requires proof of full-time student status at the time of enrollment. Forms are available on the CareFirst.com Broker website. An over-age dependent may maintain a full-time job and be eligible if they meet other requirements. 13

14 ENROLLING ELIGIBLE DEPENDENTS (cont d) Disabled Dependents: Eligibility may continue past age 23 for unmarried dependents who are mentally or physically incapacitated while covered under the health benefit plan and became disabled prior to reaching the limiting age, or the person was covered as a disabled dependent immediately prior to applying for coverage. Certification of eligibility is required through the submission and acceptance of a Disability Certification For Overage Dependent form. The parent must sign the top portion of the form and the attending physician must complete the bottom portion of the form. Supporting documentation from the physician must be attached to the form when submitted to CareFirst. Once reviewed and accepted by CareFirst, the dependent will be coded as a disabled dependent on the subscriber s policy. If found ineligible to remain enrolled as a disabled dependent, the child may select a policy through the Individual Market Division. CareFirst may request proof of mental or physical incapacity at any time. Domestic Partner Dependents: Available to DC, MD and VA groups. Requests should be made on company letterhead with eligibility to commence first of the month following receipt. Coverage may also be added at the employer s discretion on renewal or off-cycle with no rate or renewal date impact Suggested that the Subscriber consult with a tax advisor regarding the cost of coverage for a person who is not a spouse or a child through marriage, as payments made by the employer may be taxable income to them. Requirements for eligibility are monitored by the employer and may be subject to audit by CareFirst subsequent to the initial enrollment. Requirements for Domestic Partner eligibility are as follows: If the couple resides in a jurisdiction that requires or permits registration with that jurisdiction s government as a domestic partnership, the couple has registered in accordance with the law of that jurisdiction. The Subscriber and the Domestic Partner are the same sex or the opposite sex and both are at least eighteen years of age and have the legal capacity to enter into a contract. The Subscriber and Domestic Partner are not parties to a legally recognized marriage, either to each other or to anyone else. The Subscriber and Domestic Partner share no blood or familial relationship that would bar marriage under the laws of the jurisdiction in which the couple resides, and neither the Subscriber nor the Domestic Partner are a member of another Domestic Partnership or substantially similar relationship. The Subscriber and Domestic Partner share a close, committed and exclusive personal relationship that is meant to be of lasting duration. The Subscriber and Domestic Partner have a shared common legal residence continuously for at least six months and have submitted documentary evidence of such cohabitation that is satisfactory to the Group. The Subscriber and/or the Domestic Partner have not been a member of another Domestic Partnership or substantially similar relationship within the past six months. The Subscriber and Domestic Partner are Financially Interdependent, as defined below and submit documentary evidence of such interdependence that is satisfactory to the Group; have both signed the appropriate affidavit, enrollment form, or other document(s) required by the Group, confirming their Domestic Partnership and agree to notify the Group, in writing, within thirty (30) days of the date of the Domestic Partnership. 14

15 ACCOUNT ELIGIBILITY An account must be headquartered or have a physical location in DC, MD or Northern Virginia East of Route 123 including the city of Fairfax and town of Vienna to be covered under a small group product. Enrolled groups that drop to less than two full-time employees should contact their General Producer (GP), Full-Service Producer (FSP) or Sales Representative for information on individual direct pay coverage. EXCLUSIVITY CareFirst requires exclusivity from all accounts, meaning no product offered by a carrier other than CareFirst may be offered to employees. Union accounts are the only exception to this rule. EMPLOYER CONTRIBUTION To be eligible for Group coverage, the employer must contribute an amount equal to at least 50% of the cost of the Individual Coverage for enrolled employees. Annual Enrollment Certification CareFirst and/or CareFirst BlueChoice, Inc. reserve the right to inspect the records of the Group after 60 days from the effective date of the Group coverage in order to verify the eligibility of employees and their dependents. In addition, the Group may be required to complete and return to CareFirst and/or CareFirst BlueChoice an Employee Status Certification annually. Minimum Participation Requirements: The requirements in this section do not apply to Virginia small groups electing coverage under Virginia Essential or Standard Health Benefit Plans. The Group must enroll and maintain enrollment (unless otherwise approved by the Company) as stated below: If Point of Enrollment or BlueChoice Opt-Out Plus Open Access is selected, this must be the sole health plan offered by the Group to its employees. Groups must enroll and maintain enrollment of 75% of all employees eligible for medical coverage and for each ancillary product purchased, if offered (or 100% if the employer pays the entire Individual Coverage premium). The ancillary products are dental and vision benefits. If at any time there are less than 75% enrolled in any of the medical or ancillary products, CareFirst reserves the right to rescind the proposal, revise the rates, terminate the product that does not meet the 75% requirement, or refuse to renew the product that does not meet the 75% requirement. The Group cannot enroll in their HMO programs (other than CareFirst BlueChoice) more than 25% of the total number of employees enrolled in all health programs offered through the Group. The Group cannot continue to enroll new employees in their staff model HMO. The following employees should be excluded from the above counts: Those employees who have coverage under their spouse s or parent s group coverage, CHAMPUS, Medicare as primary under TEFRA, or their prior employer s plan under COBRA. Those employees enrolled in other Company coverage or covered under any Company affiliate. 15

16 ACCOUNT ELIGIBILITY (cont d) At least two employees must be employed full-time and enrolled under the Group s coverage at all times. (Note: Those employees either complementary to Medicare coverage do not count toward the two employee minimum enrollment requirement.) Enrolled Groups that drop to less than two full-time employees should contact their Sales Representative to arrange for individual direct pay coverage. If at any time total enrollment increases or decreases by 10% or more, the Company reserves the right to rescind the proposal, revise the rates, terminate this contract, or refuse to renew this contract. The basis for determining whether an enrollment increase or decrease has occurred will be the total enrollment: 1. on the effective date or contract renewal date versus the total enrollment proposed at the time the rates were developed; and 2. on the first day of any month during the contract period versus the total enrollment proposed at the time the rates were developed. CareFirst/CareFirst BlueChoice will notify the group for any rate adjustments allowed under the terms of this contract no later than 45 days prior to the effective date of the rate change. Sole Proprietor, Partnership or Corporation: A company insured with CareFirst must be an active entity with a Federal Tax I.D., engaged in a trade or business, consisting of at least 2 full-time employees. Enrollment BlueChoice Products: All enrolling members must reside and/or work in the BlueChoice enrollment service area in order to be enrolled in any of the BlueChoice products. All members must choose a primary care provider no matter what CareFirst BlueChoice product they are choosing including HMO, HMO Open Access, Opt-Out Open Access and Opt-Out Plus Open Access. Eligibility Period for New Employees: Account must define a specific waiting period(s) for employee Waiting period can be any length of time not to exceed one year Waiting period may not be discriminatory or involve health related matters Once defined in Group Application or Group Contract, a new Group Application/Contract must be submitted to change the waiting period Waiting periods using the word month will be calculated on the number of days in the month applying to the specific new hire (28,30, 31) Day 1 of a waiting period begins the day after the date of hire If the waiting period includes verbiage referencing the first of the month after a specific time period (i.e. 30 days) and the end of the time frame falls on the first day of the month, the effective date would be the first day of the following month, not the last day of the time period If the group elects to change their new hire waiting period, current employees who have not completed their waiting period will be effected as follows: o If the new waiting period is longer that the prior one, the new waiting period is applied to the employee s original hire date If the new waiting period is shorter than the prior one, the employee is effective on the effective date of the waiting period change Reinstated employees must fulfill a new waiting period and complete a new enrollment form unless the employer chooses to waive the waiting period based on the nature of the reinstatement and applies that decision to all similar reinstatements New employees must fulfill their waiting period prior to enrolling even if the group s annual open enrollment occurs during the waiting period; the group s annual open enrollment does not override the waiting period. 16

17 MUTIPLE OPTION OFFERINGS Groups can choose up to 3 medical options. New/Renewal rates are calculated based on Small Group Rating guidelines. A discount is provided to groups with a single medical option Participation requirements will be assessed on the total enrollment in the account and not on each option Employer may apply up to two new hire eligibility periods to defined segments of employees within the same account. (i. e. Managers vs. non-managers, hourly vs. salary) All employee segments must be offered all product options; classing out of employees is not permitted The options offered must be differentiated by the medical benefits offered, and may not be limited to an Open Access or prescription drug benefit differentiation Regional Dental: If two (2) or three (3) medical plans are offered, two (2) dental plans may be offered as long as the offering includes no more than one (1) option from a product type (Regional Traditional, Regional Preferred PPO or DHMO) If one (1) medical option is offered, a Regional Traditional or Regional Preferred PPO plan may be offered. Two (2) Rx options can be offered if two (2) medical options are offered; three (3) RX options can be offered if there are three (3) medical options offered Open Access cannot be used as the only differentiation between the same option number under the same product. Groups Moving Outside of the CareFirst BlueCross BlueShield Service Area Insurance coverage is portable at the option of the insured. Once purchased, group coverage must be renewed even if the group leaves the CareFirst service area, at the option of the insured unless: o Renewal does not constitute a new sale so there are no insurance violations if we renew in an area where we are not licensed o The product is a network only product and, that network is not available in the relocated area. Network only contracts have been defined as HMO only with no opt-out benefit to an indemnity network. Once renewed pursuant to the portability rules, the policy may not be altered by the group - no changes of any kind (except those required by law). Applying the above rules, a straight BlueChoice (or CapitalCare) contract must terminate if there is no HMO network to support enrollees. Virginia will be the exception, as we have a BlueChoice network that extends beyond our service area. All other products have an opt-out provision, are indemnity or include BlueCard and must be renewed at the option of the group. 17

18 MUTIPLE OPTION OFFERINGS (cont d) Jurisdictional references are listed below: Group is currently located in VA and moves to MD and qualifies for MSGR benefits. The group can keep their current VA benefits (regardless of medical product). The group cannot change their benefits or make enrollment changes unless they accept MSGR benefits Group is currently located in DC and moves to VA within our service area. The group can keep their current DC benefits (regardless of medical product). The group cannot change their benefits or make enrollment changes unless they accept VA benefits. Group is currently located in DC and moves to VA outside our service area. They can keep their current DC benefits (unless they have HMO and the network is not available in the relocated area). The group cannot change their benefits or make enrollment changes. Group is currently located in DC with HMO coverage and moves to FL*. The group must be termed. Group is currently located in DC with POS coverage and moves to FL*. The group can keep their current DC benefits. The group cannot change their benefits or make enrollment changes. Group is currently located in MD with MSGR benefits and moves to FL* The group has HMO and PPO. The group can keep their PPO benefits but must term the HMO benefit. However, we would need to allow the HMO members the option of enrolling in the PPO. After that change the group cannot change their benefits or make enrollment changes. Group is currently located in VA within our service area and moves to VA but outside our service area. The group can keep their current VA benefits unless there is a loss of network access in the HMO only product. The group cannot change their benefits or make enrollment changes. It is important to note that HMO in the portability context means a straight HMO without any opt-out provision. *Any State other than DC, MD or VA. 18

19 AFFILIATED COMPANIES In determining the number of eligible employees, companies which are affiliated companies or which are eligible to file a consolidated federal income tax return shall be considered one employer. The key phrase here is eligible to file ; the type of affiliation between the parent company and the others will determine whether or not they are eligible to file a consolidated tax return or separate returns. In other words: PARENT COMPANY TAX FILING METHOD LEGISLATIVE INTERPRETATION Corporation If corporation has 80% If the group chooses not to file Ownership or more in the consolidated, they would be Other businesses, they have considered separate. If the group A choice of filing separate chooses to file consolidated they Returns OR a consolidated are considered one group. Tax return. If corporation has less than Since they are not eligible 80% ownership in the to file consolidated tax Other businesses, they must returns, they are considered separate employers File separate tax returns. Sole Proprietor Must file separate tax returns Since they are not eligible to file consolidated tax returns, they are considered separate employers. Partnership Must file separate tax returns Since they are not eligible to file consolidated tax returns, they are considered separate employers. Two companies that have different names and different employer tax ID numbers are not automatically Small Group eligible as two separate employers. IMPORTANT: PLEASE CHECK ON THE AMOUNT OF OWNERSHIP BETWEEN THE COMPANIES AND HOW THE COMPANIES INTERACT WITH EACH OTHER! 19

20 ACCOUNT ELIGIBILITY VERIFICATION As a requirement for all new business and upon request at renewal, an account must provide a copy of their most recent quarterly Wage and Tax Statement. This quarterly document, filed with the State of Maryland, Virginia and the District of Columbia lists all compensated employees for unemployment tax purposes. It is via this document that CareFirst will be able to determine the total number of eligible employees. When the Wage and Tax Statement is submitted, the account should note eligibility status next to each employee. For example: Mary Peters John Smith Steve Meyers Susan Jones no insurance group spousal waiver part-time probationary/waiting period Note that the most current Wage and Tax statement filed with the State of Maryland, Virginia or the District of Columbia is required on all new accounts including those transferring from one company within CareFirst to another (GHMSI, BlueChoice). CareFirst requires a duplicate copy of the Wage and Tax Statement sent to the state. W-4 s are required for those employees not appearing on the Wage and Tax, unless they are an owner. Owner s name and social security number should be written on the bottom of the Wage and Tax and identified as such with the number of hours worked per week and eligibility status. Payroll Registers in Lieu of Wage & Tax Statement Payroll registers will be accepted in lieu of the Wage and Tax Statement when the payroll register is filed as an amendment. This option should only be exercised on an exception basis when the Wage and Tax Statement is not available. If a payroll register is provided, it must be generated by a payroll service (EasyPay, ADP, etc.) and must not be generated by software via desktop computers. Newly Formed Companies When a newly formed company does not have a Wage and Tax Statement, they should submit a notarized letter on company letterhead listing their employees, the number of hours per week and their eligibility status. W-4 s must be submitted for each employee as well as the business formation documents. The application for the Wage and Tax Statement should be submitted as well, if available. Annual Enrollment Certification: CareFirst reserves the right to inspect the records of the Group after 60 days from the effective date of the Group coverage in order to verify the eligibility of employees and their dependents. In addition, the Group may be required to complete and return to CareFirst an Employee Status Certification annually. Segment Migrations from 50+ Between 90 and 120 days prior to the group s renewal, underwriting produces a listing of groups that are being moved between market segments. For those groups that have had less than 50 enrolled contracts for a consistent 6 month period, these groups will be migrated to the under 50 market segment. Consequently, for those groups that have had more than 51 contracts for a consistent 6 month period, these groups will migrate to the 51+ market segment. Groups With New Federal Tax ID Numbers A new Federal Tax ID number is generally consistent with a change of entity for the group (ie: sole proprietorship shifting to a partnership or new ownership) and requires that the original group be termed and the new entity written as a new group. This may be of concern for existing DC and VA groups subject to medical underwriting and groups currently offering a high deductible plan. 20

21 TAX DOCUMENTATION The following information was either provided by State legislation or by the appropriate Insurance Bureau to determine which tax documents are available to verify eligibility of an employer group and its employees: TYPE OF BUSINESS WAGE AND TAX STATEMENT REQUIRED IF EMPLOYEES ARE WAGE AND TAX STATEMENT NOT REQUIRED IF EMPLOYEES ARE IF NO DLLR/OUI 15/16 REQUIRED, SUBMIT INSTEAD Corporation Form 1120, Form 1120-S or Articles of Incorporation showing owners of business Sole Proprietors Owner s children Owner Signed Schedule C/ F (over age 21) Spouse Showing at least Other Owner s Husband and employees children wife as (under age 21) Owners** Partnership Spouse Partners Form 1065 and signed Owner s K-1 forms for children each Other **Partner employees Non-Profit Organization Any employee(s) IRS Form 501(c)(3) a.k.a. Letter of Determination w/ notarized letter on company letterhead, listing employees, hours per week/eligibility status* Note that a current Wage and Tax Statement is required on all accounts. Stock certificates are not accepted as proof of ownership. *In lieu of Form 501 C 3, CareFirst will accept the Charter Documents of the organization along with an Affidavit of a CPA certifying the status of the organization pursuant to IRC 501 C 3. **If the owners are the only employees, they must submit a notarized letter on company letterhead listing each name, the number of hours per week each works, and their eligibility status. Note: In most cases, corporations will have a formal Wage & Tax Statement** 21