UNDERWRITING QUICK REFERENCE GUIDE SMALL BUSINESS GROUP. What works for you?

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1 Healthcare UnitedHealthcare UnitedHealthcare UnitedHealthcare UnitedHealthcare UnitedHealthcare UnitedHealthcare UnitedHealthcare UnitedHealthcare UnitedHealthcare UnitedHealthc edhealthcare UnitedHealthcare UnitedHealthcare UnitedHealthcare UnitedHealthcare UnitedHealthcare UnitedHealthcare UnitedHealthcare UnitedHealthcare UnitedHealthcare UnitedHealt Healthcare UnitedHealthcare UnitedHealthcare UnitedHealthcare UnitedHealthcare UnitedHealthcare UnitedHealthcare UnitedHealthcare UnitedHealthcare UnitedHealthcare UnitedHealthc UNDERWRITING QUICK REFERENCE GUIDE SMALL BUSINESS GROUP What works for you?

2 UnitedHealthcare We are proud of our commitment to agents throughout Illinois. We recognize the value you bring to small business, and your critical role in the partnership between small employers and UnitedHealthcare. Our staff is dedicated to servicing your needs and those of the employer. The information in this guide is intended as a tool designed to help you better understand: medical underwriting requirements life and dental product guidelines post-sale administrative options and eligibility provisions Also, included in the back of this guide are a few sample administrative forms for your reference. 1

3 Medical Underwriting Requirements/pre-sale Medical Underwriting requirements may change and Medical Underwriting reserves the right to request additional information as they deem necessary. In addition, if there are discrepancies between this document and any employer contract or certificate of coverage, the contract or certificate of coverage will prevail. Category Explanation/Requirements MEDICAL HISTORY REQUIREMENT Medical history requirements are based on the number of eligible employees. Employees at groups with 2 to 25 eligible employees will be required to complete long-form medical histories. Employees at groups with 26 to 50 eligible employees will be required to complete short-form medical histories. RATING STRUCTURE Rating structure is based on the number of eligible employees. Groups with 2 to 25 eligible employees will be age/sex or table rated. Groups with 26 to 50 eligible employees will be class or factor rated [employee only; employee + spouse; employee + child(ren); employee + spouse + child(ren)]. DUAL OPTION (OFFERING OPEN ACCESS) Available for groups with 10 or more eligible employees. All groups with 10 to 50 employees receive a 4% rate load EXCLUDING CLASSES Not permitted for groups with 10 or less eligible employees. On groups with 11 to 50 eligible employees, up to two classes will be permitted. Examples of acceptable classes include: hourly and salaried; union and non-union; management and nonmanagement. REQUIREMENTS FOR NEW CASE SUBMISSION Binder check for one month s premium payable to UnitedHealthcare of Illinois, Inc. Completed Small Group Application Copy of the group s most recent billing statement from the current carrier Copy of the most recent quarterly wage & tax statement (employee roster portion). Completed and signed enrollment forms/waivers for all eligible employees Different company names listed on past bill, wage & tax, group application, etc. will need an explanation and possible proof 2

4 WAGE & TAX ALTERNATIVES Type of Business Required Documentation C Corporation S Corporation Common Ownership Partnership Sole Proprietorship Limited Liability Company (LLC) Church Farm Articles of Incorporation, Form 1120, current wage and tax or current payroll records Articles of Incorporation, Form 1120S, K-1s on owners/partners, current wage and tax or current payroll records. (Only the shareholders of an S Corporation may collect dividends as all or a part of their wages.) Have group s attorney, accountant, or officer complete UnitedHealthcare s standard form regarding Common Ownership. See required sample letter attached Partnership agreement, Form 1065 and K-1s on the partners of the partnership, current wage and tax or current payroll records (if employees are not partners). Only the partners of a partnership can take a draw from the company and still be considered an eligible employee. Business license (if in business less than one year and a Schedule C has not been filed yet) or Schedule C, and current payroll records for employees other than the owner. Only the owner of a sole proprietorship can take a draw from the company and still be considered an eligible employee. LLC agreement; Either C Corporation or Partnership documentation (see above). Form 941 and current payroll records Schedule F; current payroll records WAGE & TAX/PAYROLL REQUIREMENTS Most recent statement All pages submitted Marked to indicate all part-time, full-time, terminated, ineligible, etc. employees Wage & Tax for out-of-area employee(s) needed if person(s) not listed on Wage & Tax submitted 3

5 PAYROLL RECORD REQUIREMENTS Dated payroll and/or date of pay period Name of company Total number of hours worked by each employee Total number of employees Total taxes withheld, itemized BILLING STATEMENT REQUIREMENTS Most recent statement All terminated employees clearly marked, including termination date(s) Cobra/Continuation applications or waivers included if terminated within days and still listed on billing statement ENROLLMENT FORM REQUIREMENTS All medical history questions answered and explained Enrollment forms submitted for those in waiting period Signed and dated within 90 days of requested effective date WAIVER REQUIREMENTS Waiver section of enrollment form completed Reason for waiving clearly indicated Waivers submitted for those in waiting period Waiver section signed and dated within 90 days of requested effective date EMPLOYER CONTRIBUTION REQUIREMENTS Minimum of 50% of the single rate PARTICIPATION REQUIREMENTS Minimum of 50% of the eligible employees must apply Excluding eligible waivers, 75% of the eligible employees must apply EMPLOYEES IN WAITING PERIOD Enrollment forms are required if a new employee is within 90 days of being eligible for coverage. If new employees in the waiting period appear on the Wage & Tax, include hire dates and either application for coverage or waiver. COBRA WAIVERS Former employees waiving because they are covered by Cobra must complete the Medical History and waiver section of the enrollment form. EFFECTIVE DATES/BACKDATING 1st of the month effective date: A group must be approved no later than the 10th of the month in order to backdate coverage to the 1st of the month. A new group submission should be submitted complete to Medical Underwriting no later than the 5 th of the month in order to backdate the coverage to the 1 st of the month. 15th of the month effective date (11-1/2 month contract): A group must be approved no later than the 25 th of the month in order to backdate coverage to the 15 th of the month. A new group submission should be submitted complete to Medical Underwriting no later than the 10 th of the month in order to backdate the coverage to the 1 st of the month. 4

6 INDEPENDENT CONTRACTOR (1099) GUIDELINES See required sample letter attached RETIREE COVERAGE GUIDELINES See required sample letter attached 24-HOUR COVERAGE (AO COVERAGE) SEASONAL EMPLOYEES PEO ( PROFESSIONAL EMPLOYEE ORGANIZATION ) GROUPS EMPLOYERS UTILIZING LEASED EMPLOYEES See required sample letter attached A person paid as a 1099 employee can be considered an eligible employee if: 1099 employee must work full-time, year-round for the employer applying for coverage Employer must agree to contribute the same amount toward the 1099 employee s premium as the taxed employees Employer must agree to require the same waiting period for 1099 employees as taxed employees Employer must agree to offer coverage to all 1099 employees in the same employment situation, including future 1099 employees Employer group must have a minimum of two taxed employees, and both must apply A letter on company letterhead listing all 1099 employees and stating that the employer agrees to comply with the aforementioned conditions is required. Any 1099 employees who do not fit into the new definition of eligible should be listed with an explanation of their ineligibility. Employer must agree to contribute a minimum of 50% of the cost of the retiree s premium Employer must provide documentation that current health insurance carrier is providing retiree coverage All eligible retirees must complete and submit the same enrollment form (including medical history section) as active employees Employer must agree to offer coverage to all retirees who meet these qualifications, including those who retire in the future A letter on company letterhead listing all retirees and stating that the employer agrees to comply with the aforementioned conditions is required. (A form letter is available.) Please note: Retiree coverage is not available to groups purchasing the following products: Options PPO, Select Premier HMO, Managed Indemnity, and Select POS. 24-hour medical coverage is available to owners, officers and partners of a company who are not covered under workers compensation. This option provides medical coverage for injuries and illnesses stemming from occupational exposures. A premium load may be assessed to the entire group, determined by the percent of employees being covered. Employees working a minimum of 30 hours per week less than 9 months per year are considered seasonal and are not eligible for coverage. Coverage to PEOs and their employees is not offered All leased employees must be eligible for coverage on the same basis as other employees The employer must complete and sign the application for coverage UnitedHealthcare must be the sole provider of health insurance for all eligible employees UnitedHealthcare will bill the employer for coverage, not the PEO The required eligibility information will include the standard documents for any small employer group. 5

7 Life, AD&D, Dependent Life Guidelines CONTRIBUTION PARTICIPATION GUARANTEE ISSUE/MAXIMUM AMOUNTS ADDING LIFE OFF RENEWAL SALARY-BASED LIFE LIFE CLASSES DEPENDENT LIFE RETIREE COVERAGE SHORT-TERM DISABILITY 25% or more of the employee rate 75% with 25% to 99% contribution 100% with 100% contribution Groups with 2 to 5 eligible employees No guarantee issue; maximum of $50,000 Groups with 6 to 19 eligible employees $50,000 guarantee issue; maximum of $175,000 Groups with 20 to 50 eligible employees $100,000 guarantee issue; maximum of $250,000 Coverage exceeding guarantee issue amount can only be done at renewal. Coverage for guarantee issue amount can be added at any time. Amounts may be offered for 1, 2, 3, 4, or 5 times salary (see Guarantee Issue/Maximum Amounts guidelines above) Differences in class amounts may not exceed 2-1/2 times The following three options are available: 1. $2,000/$1,000 (spouse/dependent) 2. $4,000/$2,000 (spouse/dependent) 3. $7,500/$3,750 (spouse/dependent) Not available Not available Dental Guidelines CONTRIBUTION PARTICIPATION PLAN DESIGNS 50% or more of the employee rate 75% of eligible employees, net of waivers Minimum of 50%, including waivers Note: It is not required that the same employees that choose medical coverage also choose dental coverage. Various PPO plan designs are available for groups of 2 to 50 eligible employees. Please review our Benefit Options Checklist or Dental brochures for more information. 6

8 Standard Administrative Options/(post-sale) Category Open Access or Select HMO Options PPO, Select Premier HMO, Managed Indemnity, or Select Plus POS INVOICE FREQUENCY GRACE PERIOD DELINQUENT POLICY MANDATORY ENROLLMENT INTO PRODUCTS Monthly 31 days (This is the number of days during which UnitedHealthcare will wait for payment without terminating the group. This is not necessarily an interest-free period.) Payment is due the 1st of each month. If no payment is received within 10 days after the due date the collection process will start. A reinstatement charge will be assessed to any reinstated group. Only one reinstatement is allowed during a contract year and is not guaranteed. A policy that is not paid by the due date is considered delinquent and late charges may be assessed against any delinquent policy. If the employer contributes 100% toward any ancillary (life and AD&D, dependent life, or dental) premium, then the employees must elect that product s coverage. It is mandatory. RETROACTIVE ADDITIONS 60 days from the effective date 30 days from the effective date RETROACTIVE TERMINATIONS 60 days from the effective date BILLING CUTOFF DATE FOR EMPLOYEES 15 th Day Rule If Date of Event administration is Effective on or before the 15 th of the chosen, monthly fee is prorated. month bill full month Effective on or after the 16 th of the month will not be billed until the 1 st of the following month Termination on or before the 15 th of the month full month credit. Termination effective on or after the 16 th of the month full month premium charged. Please note: Proration is only done on a new group if the effective date is other than the 1 st of the month (i.e., the 15 th ). DATE OF BIRTH CALCULATION At group s renewal date 1 st of the insurance month following date of birth MAXIMUM NUMBER OF CHILDREN BILLED 3 3 (AGE/SEX-RATED GROUPS) OPEN ENROLLMENT PERIOD Month prior to renewal 7

9 Standard Eligibility Provisions/(post-sale) DEPENDENT/STUDENT MAXIMUM AGE Unmarried child up to 19 years/unmarried child up to 25 years EFFECTIVE DATE FOR NEW HIRES 1 st of the month following waiting Date-of-event administration 1 st period (up to six months); or of the month following waiting Date of hire; or period (up to six months); or 1 st day following waiting period (up to Non-date-of-event administration six months) date of hire MINIMUM HOURS WORKED PER WEEK TO BE ELIGIBLE 30 to 40 hours (determined by employer group) EFFECTIVE DATE OF TERMINATION Date of term (see 15 th Day Rule under Date-of-event administration Billing Cutoff Date above) last day of the month in which the term occurs Non-date-of-event administration date of term EFFECTIVE DATE FOR RETURN TO Date of return Date-of-event administration EMPLOYMENT (LEAVE, STRIKE, LAYOFF) date of return Non-date-of-event administration 1 st of the month following date of return DATE FOR STATUS CHANGE Date of change (see 15th Day Rule under Date-of-event administration Billing Cutoff Date above) date of change Non-date-of-event administration 1 st of the month following change EVENTS DUAL COVERAGE (EMPLOYEE WORKS FOR 2 EMPLOYERS AND IS COVERED UNDER BOTH POLICIES) DOUBLE COVERAGE (HUSBAND/WIFE WORK FOR SAME EMPLOYER AND COVER EACH OTHER) HANDICAPPED COVERAGE EMPLOYER PLAN TERMINATION VOLUNTARY TERMINATION Newborn; marriage; divorce; adoption; hardship; death; loss of other coverage Not allowed Not allowed Yes, covers above and beyond maximum dependent age. Requires documentation from physician. UnitedHealthcare may terminate group coverage for: Nonpayment of premiums (The group is liable for payment of premiums for the entire term the policy is in force, including the grace period.) Not meeting contribution requirements (31 days advance notice) Not meeting participation requirements (31 days advance notice) Coverage may be terminated on the date specified by the policyholder, after at least 31 days prior written notice to UnitedHealthcare. The written notice must be signed by an officer of the group/policyholder. Exclusions and coverage limitations are detailed in the certificate of coverage. If this document conflicts in any way with the certificate of coverage, the certificate s provisions prevail. 8

10 Common Ownership Please have this form completed and signed by the enrolling group s Accountant, Attorney or Officer of the Company The Health Insurance Portability and Accountability Act of 1996 states that all persons treated as a single employer under subsection (b), (c), (m), or (o) of section 414 of the Internal Revenue Code of 1986 shall be treated as one employer. Please list all companies that would qualify as one employer under the above referenced sections of the Internal Revenue Code. Name of Group on Employer Application BUSINESS NAME EMPLOYER IDENTIFICATION NUMBER I certify that the applicant is a single employer under section 414 of Internal Revenue Code of 1986 [26 U.S.C. 414 (b), (c), (m), or (o)], and under any applicable state law. Signature: Date: Relationship to Company (e.g. Attorney, Accountant or Officer): 9

11 Independent Contractors Paid by 1099 Form It is possible for an Independent Contractor paid by 1099 Form to be considered eligible for your UnitedHealthcare group health plan. It is your choice as the employer to consider these individuals to be eligible for coverage. Should you choose to include these individuals in your group health plan, UnitedHealthcare requires you and the Independent Contractor to meet the following guidelines: 1) The Independent Contractor paid by 1099 must work for your company on a full-time, year-around basis. 2) You, the employer, agree to contribute the same amount of money toward the premium as you would for your regular, taxed employees. 3) You, the employer, agree to require the same waiting period for Independent Contractors as for your regular, taxed employees. 4) You, the employer, agree to extend the coverage offering to all Independent Contractors who meet these qualifications, including those you may hire in the future. 5) Your business has a minimum of two regular, taxed employees who are applying (possibly including yourself). If you agree to meet all of the above requirements, you may consider your Independent Contractors eligible for your group health plan. Please list below all individuals who meet these qualifications. Name Social Security Number Date of Hire I agree to the above qualifying conditions to consider Independent Contractors eligible for the group health plan sponsored by my company, and attest to the accuracy and completeness of the information given here. Signature of Owner 10 Date

12 Retirees Eligible for Coverage Under the Group Health Plan It is possible for a retired former employee to be considered eligible for your UnitedHealthcare group health plan. It is your choice as the employer to consider these individuals to be eligible for coverage. Should you choose to include these individuals in your group health plan, UnitedHealthcare requires you and the Retiree to meet the following guidelines: 1) You, the employer, must agree to contribute a minimum of 50% of the cost of the retiree s health coverage. 2) You, the employer, must provide documentation that your current health carrier is offering retiree coverage. 3) All eligible retirees must complete and submit the same health application as the active employees. 4) You, the employer, must agree to extend the coverage offering to all retirees who meet these qualifications, including those who may retire in the future. If you agree to meet all of the above requirements, you may consider your retirees eligible for your group health plan. Please list below all individuals who meet these qualifications. Social Date of Start Date of Date of Security Qualifying Current Group Name Birth Number Employment Coverage I agree to the above qualifying conditions to consider retirees eligible for the group health plan sponsored by my company, and attest to the accuracy and completeness of the information given here. Signature of Owner 11 Date

13 PEO/Leased Employee Verification Form Small employers who want to include their leased employees in their group health plan must meet the following criteria: 1) As the employer, I have the sole authority to hire and fire the leased employees. 2) All leased employees must be considered eligible for coverage on the same basis as non-leased employees. 3) The total number of eligible employees (leased and non-leased) will be used to determine if the group qualifies as a small employer under federal and state law. 4) UnitedHealthcare must be the sole provider of health insurance for all eligible employees (leased and non-leased). 5) An officer of the small employer (not the PEO or Leasing Company) must complete and sign the application for coverage. As a small employer with leased employees, I agree to the above conditions and documentation requirements enabling me to consider my leased employees eligible for, and included in, the health insurance benefits offered by my company. Name of Business Business Owner s Signature Date 12

14 / UnitedHealth Group Incorporated Insurance coverage provided by or through: United HealthCare Insurance Company, United HealthCare Insurance Company of New York, or their affiliates. ealthcare UnitedHealthcare UnitedHealthcare UnitedHealthcare UnitedHealthcare UnitedHealthcare UnitedHealthcare UnitedHealthcare UnitedHealthcare UnitedHealthcare UnitedHealthcar dhealthcare UnitedHealthcare UnitedHealthcare UnitedHealthcare UnitedHealthcare UnitedHealthcare UnitedHealthcare UnitedHealthcare UnitedHealthcare UnitedHealthcare UnitedHealth ealthcare UnitedHealthcare UnitedHealthcare UnitedHealthcare UnitedHealthcare UnitedHealthcare UnitedHealthcare UnitedHealthcare UnitedHealthcare UnitedHealthcare UnitedHealthca