Virginia underwriting brochure

Transcription

1 Quality health plans & benefits Healthier living Financial well-being Intelligent solutions Virginia underwriting brochure Plans effective January 1, 2015 For businesses with 1 50 employees VA C (11/14)

2 Underwriting guidelines This material is for informational purposes only and is not intended to be all inclusive. Other policies and guidelines may apply. Note: State and federal legislation/regulations, including Small Group Reform and Affordable Care Act (ACA) take precedence over any and all underwriting rules. Exceptions to underwriting rules require approval of the Director of Underwriting, except where Executive Director of Underwriting approval is indicated. This information is the property of Aetna and its affiliates ( Aetna ), and may only be used or transmitted with respect to Aetna products and procedures, as specifically authorized by Aetna, in writing. All underwriting guidelines are subject to change without notice. Product Availability Medical Medical coverage may be written stand-alone or with ancillary coverage. Dental 2 eligible employees Contributory (non-voluntary) dental plans available with medical. Voluntary dental plans not available. 3 to 50 eligible employees Contributory (non-voluntary) and voluntary dental plans available with or without medical. Standalone dental is available and has ineligible industries. Orthodontic coverage Available with 10 or more eligible employees with a minimum of five enrolled employees for dependent children only. Vision Available to groups with two or more eligible employees. Single option only (dual option, triple option not available). Vision only is allowed; or can be sold with medical and ancillary products. Life and/or disability 2 to 9 eligible employees if sold with medical. 10 to 50 eligible employees if sold with medical or dental. 26 to 50 eligible employees on a stand-alone basis. Packaged life and disability 2 to 50 eligible employees if sold with medical. 10 to 50 eligible employees on a stand-alone basis. A plan sponsor cannot purchase both life and packaged life and disability plans. Product packaging rule is a group level requirement. Employees will be able to individually elect life, disability or packaged life & disability insurance even if they do not elect medical coverage. Health/dental benefits plans, health/dental insurance plans, life insurance and disability insurance plans/policies are offered, underwritten or administered by Aetna Health Inc. and/or Aetna Life Insurance Company (Aetna). Each insurer has sole financial responsibility for its own products. 2

3 Product Availability (continued) Case Submission Dates Census Data COBRA/State Continuation Disability Groups are ineligible for disability coverage if 60 percent or more of eligible employees, or 60 percent or more of eligible payroll are employees over 50 years old. Conversion options are not available. Available to employees only; dependents are not eligible. Employees may elect disability coverage even if they do not elect medical coverage. All new business submissions must be received by Aetna Underwriting the 20 th of the prior month for the 1 st of the month effective dates; and by the 5 th of the month for 15 th of the month effective dates. If past the cut-off date, complete the New Business Late Submission letter. Any cases received after the cut-off date will be considered on an exception basis only as approved by the underwriting manager. If not approved, the effective date will be moved to the next available effective date, with potential rate impact. Census data must be provided on all eligible employees, including enrolled, waivers and COBRA/state continuation enrollees. Include first and last name, date of birth, and gender for each employee, spouse and child along with date of hire, gender, dependent status, residence ZIP code and employee physical work location ZIP code. COBRA/state continuation enrollees should be included on the census and noted as COBRA/state continuation. EList can be submitted for sold groups. Rates are based on final enrollment. Retirees are not eligible. If both employee and spouse/partner work for the same company, they may enroll together or separately. COBRA coverage will be extended in accordance with federal law. Employers with 20 or more employees (full and part time) are required to offer COBRA coverage. Employers with fewer than 20 employees (full and part time) are required to offer state continuation. COBRA applies to group health plans sponsored by employers with 20 or more employees on more than 50 percent of its typical business days in the previous calendar year. --Include: full time, part time, seasonal, temporary, union, owners, partners, officers. --Exclude: self-employed persons, independent contractors (1099), directors. --Each part-time employee counts as a fraction of an employee, with the fraction equal to the number of hours that the part-time employee worked divided by the hours an employee must work to be considered full time. Because COBRA is directed at employers, the decision to comply with COBRA should be made by the employer. In situations where it may appear the employer is not subject to COBRA, for example a three-life group requesting COBRA, we will ask the employer to validate the number of employees in the prior calendar year in order to determine the number of employees for COBRA purposes. Companies under common ownership are included in the count. COBRA enrollees are not billed separately and are included with the group bill. State continuation enrollees are billed separately, directly to the individual. If the COBRA enrollee does not reside in an Aetna service area, they are only eligible for out-of-network benefits if applicable or urgent/emergency care. Life, disability and voluntary dental COBRA/state continuation enrollees are not eligible. Eligible enrollees must be included on the census. 3

4 COBRA/State Continuation (continued) Dependent Eligibility Dual Option and Triple Option (Medical only) Effective Date Electronic Funds Transfer (EFT) The qualifying event, length, start and end dates must be provided. Note: COBRA/state continuation enrollees are not to be included for the purpose of counting employees to determine the size of the group. Once the size of the group has been determined and it is determined that the law is applicable to the group, COBRA/state continuation enrollees can be included for coverage subject to normal underwriting guidelines. Spouse of employee. Domestic partners and their eligible children may be covered as eligible dependents if the employer elects this designation at contract effective date or renewal date. If the plan sponsor elects to cover domestic partners, the plan sponsor is responsible for determining whether the domestic partner is eligible. An affidavit is not required. Children: --Medical and dental: --Children are eligible as defined in plan documents in accordance with applicable state and federal laws up to age 26, regardless of financial dependency, employment, eligibility of other coverage, student status, marital status, tax dependency or residency. This requirement applies to natural and adopted children, stepchildren, and children subject to legal guardianship. --Children are eligible to the end of the month turning age Children can only be covered under one parent s plan when both parents work for the same company. --When the child works for the same company as the parent, the child may enroll separately as an employee OR as a dependent under the parent s plan. --Grandchildren are eligible if court ordered. A copy of the court order must be submitted. --Dependent life: --Packaged life 2 to 50 eligible employees and basic life 10 to 50 eligible employees children are eligible from 14 days up to their 19 th birthday or to their 26 th birthday, if in school on a regular basis and dependent solely on the employee for support. If both employee and spouse/partner work for the same company, they may enroll together or separately. Individuals cannot be covered as an employee and dependent under the same plan, nor may children eligible for coverage through both parents be covered by both under the same plan For medical and dental, dependents must enroll in same benefits options as the employee. AD&D or disability dependents are not eligible. Dual option the group must have two or more enrolled employees and may offer any combination of two plans. Triple option the group must have three or more enrolled employees and may offer any combination of three plans. Zero member enrollment plans are available upon request. Groups may offer an additional PPO/indemnity plan for out-of-state subscribers. These plans will not count toward the maximum noted above. The effective date must be the 1 st or the 15 th of the month. The effective date requested by the employer may be up to 60 days in advance. Payment for the first month s premium for new business can be processed via an electronic funds transfer/ach. Once the group is issued, customers can pay their monthly premiums online or by calling an automated phone number, , using their checking account and routing number. There is no extra charge for this service. 4

5 Employee Eligibility Employer Contribution An employee who works for a small group employer on a full-time basis, 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. At the employer s sole discretion, the eligibility criterion may be broadened to include part-time employees. Coverage must be extended to all employees who meet the above conditions unless they belong to a union class excluded as the result of a collective bargaining arrangement. While they must be included in the count in determining whether or not the group is a small employer, the employer may carve out union employees as an excluded class. Employees not eligible for coverage include leased, temporary, seasonal or substitute employees, 1099 contractors, uncompensated employees, employees making less than equivalent minimum wage, volunteers, retirees, inactive owners, directors, shareholders, officers, outside consultants, managing members who are not active, investors or silent partners. An employee can waive medical coverage and still enroll for dental, life, and packaged life/disability. Life and disability only employees who are both disabled and away from work on the date their insurance would otherwise become effective will become insured on the date they return to active full-time work one full day. Medical 50 percent of the employee-only cost or 50 percent of the total cost of the plan. Groups that do not meet contribution are eligible to enroll during open enrollment, November 15 through December 15, for a January 1 effective date. Dental 25 percent of the total cost or 50 percent of the cost of employee-only coverage for dental plans. If the employer contributes less than the above guideline, or if the coverage is 100 percent paid by the employee, coverage is deemed voluntary. Life 2 to 9 eligible employees 100 percent of the total cost of the basic term life plan. 10 to 50 eligible employees at least 50 percent of the total cost of the plans (excluding optional dependent term life). Coverage can be denied based on inadequate contributions. Employer Definition Employer Eligibility Small employer means in connection with a group health plan or health insurance coverage with respect to a calendar year and a plan year, an employer who employed an average of at least one but not more than 50 employees on business days during the preceding calendar year and who employs at least one employee on the first day of the plan year. Group applicants that do not meet the above definition of a small employer are not eligible for coverage. Medical plans can be offered to sole proprietorships, partnerships or corporations. Organizations must not be formed solely for the purpose of obtaining health coverage. Associations, Taft-Hartley groups, professional employers organizations (PEO)/employee leasing firms and closed groups (groups that restrict eligibility through criteria other than employment) and groups where no employer/employee relationship exists are not eligible. Sole proprietors, owners of S corporations and partners in a partnership qualify for coverage if there is at least one enrolled W-2 employee who is not an owner and not an owner s spouse. C corporations are eligible as long as there is at least one W-2 employee including owners. If the only employees are owners and they are W-2, the group is eligible. Dental and disability have ineligible industries, which are listed separately. The dental ineligible list does not apply when dental is sold in combination with medical. 5

6 Employer Eligibility Counting Employees To Determine Group Size Average total number of employees (ATNE) will be the method used in counting employees for determination of group size eligibility. Once the segment size is determined (1 to 50 or 51 to 100), we will use eligible/enrolled for all other guidelines product availability, participation, contribution, etc. To calculate the annual average total number of employees: 1. Count any employee receiving a W-2. This includes full-time, part-time and seasonal workers who may or may not have been eligible for your medical coverage (this does not include 1099 independent contractors). 2. When calculating the average, consider all months of the previous calendar year regardless of whether the group has coverage with Aetna, or another carrier, or no coverage at all. 3. Add each month s number to get an annual total, and then divide by 12. (Example: 253 divided by 12 = 21) 4. Use whole numbers only (no decimals, fractions, or ranges). Round up or down to the nearest whole number. (Example: 24.6 = 25) 5. Newly formed business calculate the prior year average using only those months the group was in business. Illustrative Quote include ATNE at time of quote request. New business submission complete the Affordable Care Act (ACA) Medical Loss Ratio Requirement field on the employer application. Groups with 50 or fewer total employees are rated as a small employer. Groups with 51 or more total employees are rated as a large employer. Examples 2014 ATNE Example 1 Example 2 Example 3 Example 4 Full time Part time Seasonal Total ATNE Eligibles ACA Size Small group 1 50 Large group Large group Large group

7 Employer Eligibility Counting Employees To Determine Group Size (continued) Examples Group A requests February 2015 effective date. ATNE 2014 = 48 employees, group is considered small group Group B requests March 2015 effective date. ATNE 2014 = 80 employees, group is considered large group Group C requests January 2015 effective date. ATNE 2014 = 60 employees, group is considered large group At time of quote request, group has 55 total employees. At time of quote request, group has 40 total employees. At time of quote request, group has 105 total employees. If submitted as large group, we will confirm the group is small and rate as small because the prior year the group had 48 total employees. If submitted as large group, we will confirm the group is large and rate as large because the prior year the group had 80 total employees. If submitted as large group, we will confirm the group is large and rate as large because the prior year the group had 60 total employees. Example A participation Small employer with 50 or fewer total employees 30 total employees receiving W-2 = 1 to 50 segment (rated as small group) 26 employees work 30 hours or more, 26 is the number of eligible used to calculate participation --8 have spousal group --5 have IVL = 13 x 75% = 9.75 = 9 must enroll 4 work 10 hours and are part time = not eligible to enroll Example B participation Large employer with 51 to 100 total employees 60 total employees receiving W-2 = 51+ segment (rated as large group) 30 eligible employees work 25 hours or more, 30 is the number of eligible used to calculate participation --8 have spousal group --5 have IVL = 17 enrolling (a rating adjustment may apply) 30 work 10 hours and are part time = not eligible to enroll Excluded Class/ Carve Out Medical Union employees, as a class, may be excluded by an employer as not being eligible for coverage. Management carve outs are not permitted. Dental Union employees if packaged with medical. Life Union employees if packaged with medical. 7

8 Initial Premium Late Applicants The initial premium payment should be the total of the first month s premium for all products (medical, life, disability, dental, vision); and may be in the form of a check or electronic funds transfer (EFT). Submit a copy of the initial premium check payable to Aetna or complete the ACH/EFT form (Aetna form) and send in with the new business group enrollment applications. If a copy of the check is provided, once coverage is approved, you will be advised where to mail the initial premium check. If the check is not submitted, coverage will terminate retroactive to the case effective date. If the EFT method is selected, we will withdraw the initial premium from the checking account when the group is approved. This is a one-time authorization for the first month s premium only. The initial premium submission is not a binder check and does not bind Aetna to provide coverage. If the request for coverage is denied due to business ineligibility, participation and/or contribution not met or other permissible reasons, or withdrawn, the premium will be returned to the employer. If the initial premium payment is returned by the bank for nonsufficient funds, the standard termination process will be followed. If the plan sponsor is currently with Aetna and adding medical, dental, life, disability, or vision coverage, no premium check is required. An employee or dependent enrolling for coverage more than 31 days from the date first eligible is considered a late enrollee. Applicants without a qualifying life event (that is, marriage, divorce, newborn child, adoption, loss of spousal coverage, etc.) are subject to the late entrant guidelines as noted below. Voluntary cancellation of coverage is NOT a qualifying event unless it is done at open enrollment. For example, if a spouse is covered through his/her employer and voluntarily cancels the coverage, it is not a qualifying event to be added to the other spouse s plan. The spouse who cancelled the coverage must wait until the next open enrollment to be eligible to enroll. However, if each spouse has different open enrollment dates and drops coverage during their annual open enrollment period, we would allow them to be enrolled. Medical Late applicants without a qualifying life event (that is, marriage, divorce, newborn child, adoption, loss of spousal coverage, etc.) are not allowed and will be deferred to the next plan anniversary date of the group and must reapply for coverage 30 days before the group anniversary date. Late applicants will be enrolled as of the date the individual requests coverage unless the effective date requested is more than 31 days before we receive the application. In that case, the effective date will be 31 days before we receive the application. Dental An employee or dependent may enroll at any time; however, coverage is limited to preventive and diagnostic services for the first 12 months. No coverage for most basic and major services for first 12 months (24 months for orthodontics). Late entrant provision does not apply to enrollees under age five. Life Late applicants will be deferred to the next plan anniversary date of the group and may reapply for coverage 30 days before the anniversary date. The applicant will be required to complete an individual health statement/questionnaire and provide evidence of insurability (EOI). Example Group has $50,000 life with $20,000 guaranteed issue limit Late enrollee enrolling for $50,000 would not automatically get the $20,000 Since the applicant is late, he/she must medically qualify for the entire $50,000 8

9 Licensed, Appointed Producers Live/Work (ACO availability) Only appropriately licensed agents/producers appointed by Aetna may market, present, sell and be paid commission on the sale of Aetna products. License and appointment requirements vary by state and are based on the contract state of the small employer group being submitted. To become appointed with Aetna go to and click Start working with Aetna. Medical Eligible employees who live or work in CT, DC, DE, MD, NJ, NY, PA and VA (the situs region) will receive the same rates and benefits as the headquarters location. Dental Eligible employees who live or work in CT, DC, DE, MD, NJ, NY, PA and VA (the situs region) will receive the same rates and benefits as the headquarters location. Life Employees are eligible for the same life plan selected by the employer. Medicare (MSP) for CMS Reporting Municipalities and Townships All carriers must report to CMS (Centers for Medicare & Medicaid Services) the number of Medicare secondary payer (MSP) groups and the number of employees, each year based on the number of employees provided by the employer. MSP is the term used by Medicare when Medicare is not responsible for paying first. This is generally when the Aetna plan would pay primary to Medicare for active employees and would pay first when there are 20 or more total employees (full and part time) for 20 or more weeks during this calendar year or prior calendar year. --Include: full time, part time, seasonal, temporary, union, owners, partners, officers --Exclude: self-employed persons, independent contractors (1099), directors, leased employees A township is generally a small unit that has the status and powers of local government. A municipality is an administrative entity composed of a clearly defined territory and its population, and commonly denotes a city, town or village. A municipality is typically governed by a mayor and city council, or municipal council. Underwriting requirements: --Quarterly wage and tax statement (QWTS). --W-2: Elected or appointed officials and trustees may be eligible for group coverage based on the charter or legislation. If so, they may not be on the QWTS; rather, they may be paid via W-2. In that case, obtain a copy of their prior year W If elected officials are to be covered, provide a copy of the charter or contract indicating which classes or employees are to be covered, the minimum hours required to work per week to be eligible for coverage, and confirmation that coverage will be offered to all employees meeting the minimum number of required hours and that minimum participation will be maintained. 9

10 Newly Formed Business (in operation less than three months) The following documentation must be provided: Sole proprietor Partnership or limited liability partnership A copy of the business license (not a professional license). A copy of the partnership agreement. Limited liability company Corporation A copy of the articles of organization and the operating agreement to include the signature page(s) of all officers. A copy of the articles of incorporation that includes the signature page(s) of all officers (must be followed up with a copy of the statement of information within 30 days of filing with the state). Each newly formed business must also provide: Proof of employer identification number/federal tax identification number (TIN); and QWTS. If not available, when will one be filed; and The most recent two consecutive weeks of payroll records, which include hours worked, taxes withheld, check numbers and wages earned; or A letter from the group or a CPA with the following information: 1. A list of all employees, including owners, partners, officers (full and part time) 2. Number of hours worked by each employee 3. Weekly salary for each employee 4. Date of hire for each employee 5. Whether payroll records have been established 6. When a QWTS will be filed Option Sales Medical Standard participation of 75 percent must be met in order for a group to qualify for coverage. Other insurance offered by the same employer is not a valid waiver. Dental All dental plans must be offered on a full-replacement basis. No other employer-sponsored dental plan can be offered. Life Must be written on a full or primary replacement basis. 10

11 Out-of-Situs Employees Medical Any active employee who lives and works outside of CT, DE, MD, NJ, NY, PA, VA and Washington, DC are considered outside the situs region. Out-of-situs employees can enroll in a VA PPO plan (or indemnity plan if PPO network is not available). Health coverage is not available in Hawaii and Vermont. PPO is not available in North Dakota. Louisiana: Out-of-situs employees residing in Louisiana are required to have a separate plan quoted and sold based on Louisiana rates and benefits. These employees are still underwritten as part of the group; however, the plans and rates for the Louisiana members will not be based on where the employer is located. This will require Louisiana employer and employee applications to be completed. Dental Any active employee who lives and works outside of CT, DE, MD, NJ, NY, PA, VA and Washington, DC are considered outside the situs region. Out-of-situs employees will be offered one of the dental PPO plans. employees who fall outside a dental PPO network area will default to a comparable indemnity plan. Life Employees are eligible for the same life plan selected by the employer. Participation Medical Noncontributory plans (employer pay all) 100 percent excluding valid waivers. Contributory plans 75 percent excluding valid waivers, rounding down to the nearest whole number. Example 14 minus 5 valid waivers = 9 9 x 75% = 6.75 = 6 must enroll All plans Dependent participation is not required. Groups that do not meet participation are eligible to enroll during open enrollment, November 15 through December 15, for a January 1 effective date. Waivers Employees waiving coverage must complete the waiver section of the employee application. Valid waivers include: --Spousal/parental group coverage --Individual coverage (on or off exchange) --Governmental (Medicare/Medicaid, Champus/ChampVA, Military) - - Retiree coverage through a prior employer, or association coverage (for doctors/lawyers covered under an association who want to cover their employees) 11

12 Participation Dental Noncontributory plans (employer pay all) 100 percent participation is required, excluding valid waivers, with a minimum of two enrolled. Contributory plans with medical or standalone (round to the nearest whole number) Contributory (non-voluntary) plans 2 to 3 eligible employees 100 percent required, excluding valid waivers, and a minimum of two enrolled. 4 to 50 eligible employees 75 percent required, excluding valid waivers. A minimum of two and 50 percent of total eligible employees must enroll in the dental plan. Voluntary plans 3 to 50 eligible employees 30 percent participation is required, excluding valid waivers. Minimum of three must enroll. If a group does not qualify for a contributory (non-voluntary) plan and has 30 percent or more participation, then group qualifies for voluntary. Valid waivers Spousal/parental group coverage Champus/ChampVA, military Retiree coverage through a prior employer Association coverage (for doctors/lawyers covered under an association who want to cover their employees) Contributory (non-voluntary) and voluntary Employees may select coverage for eligible dependents under the dental plan even if they elected single coverage on the medical plan, or vice versa. Coverage can be denied based on inadequate participation. Participation Life 2 to 9 eligible employees 100 percent participation is required. 10 to 50 eligible employees Noncontributory (employer pay all) 100 percent participation is required. Contributory 75 percent participation is required. Standalone life 75 percent participation is required. All plans COBRA/state continuation enrollees are not eligible. Retirees are not eligible. Employees may elect basic term life or packaged life/disability insurance even if they do not elect medical coverage. The group must meet the required participation percentage. If not, then basic term life/disability will be declined for the group. Example Nine employees Three waiving medical All nine must enroll for life Coverage can be denied based on inadequate participation. PEO (Professional Employer Organization) Groups Covered Under a PEO A group currently with a PEO may be eligible as long as the PEO provides payroll specific for the group and we can determine it is a small group. Even though the group may be reported under the PEO tax ID number, the group may be considered subject to underwriting approval. 12

13 Plan Change Employee Level Medical Employees are not eligible to change plans until the group s open enrollment period, which is at their annual renewal (except for qualified special enrollment events). Dental Freedom-of-Choice may change from DMO to PPO and vice versa at any time but must be received in Aetna Underwriting by the 15 th to be effective the next month. Life Employees are not eligible to change plans until the group s open enrollment period, which is at their annual renewal (except for qualified special enrollment events). Plan Change Group Level Medical Groups may change plans on the plan anniversary date only. Dental Dental plans must be requested five days before the desired effective date. The future renewal date of the change will be the same as the medical plan anniversary date. Life Packaged life/disability must be requested 30 days before the desired effective date. Non-packaged plans are only available on the plan anniversary date. The future renewal date of the change will be the same as the medical plan anniversary date. Prior Aetna Coverage Rating Information Replacing Other Group Coverage Signature Dates Spin-Off Groups (current Aetna customers leaving an Aetna group only) Standard Industrial Classification (SIC) Codes Groups that we have terminated for nonpayment must pay all premiums still owed on the prior Aetna plan before the new plan will be issued. Rates are based on final enrollment. All quotes are subject to change based on additional information that becomes available in the quoting process and during case submission/installation, including any change in census. If any of the information we receive is determined to be incomplete or incorrect, we reserve the right to adjust rates. Do not cancel any existing medical coverage until the employer has been notified of approval. Dental - provide a copy of the benefit summary to receive credit for: --Major and orthodontic coverage for contributory (non-voluntary) 2 to 9 and voluntary 3 to 50 eligible employees; and --Preventive and basic coverage for voluntary plans. The Aetna employer application and all employee applications must be signed and dated before and within 90 days of the requested effective date. All employee applications must be completed by the employees themselves. We will consider the group with the following: A letter from the group or broker indicating the group is enrolling as a spin-off. Letter needs to include the name of the group from which it is spinning off. Ownership documents showing that the spin-off company is a newly formed separate entity. A minimum of two weeks payroll. If the group that is spinning off has been in business longer than two weeks, payroll will be required for the amount of time in business up to a maximum of six consecutive weeks. Underwriting will use a variety of tools, including Dun & Bradstreet, to verify a group s industry code and classify the business correctly. All industries eligible for medical. 13

14 Tax Documents 1 to 9 ENROLLED Employees and 10 to 50 ENROLLED Employees with NO Prior Coverage Groups must provide a copy of the most recent quarterly wage and tax statement (QWTS) containing the names, salaries, etc., of all employees of the employer group. --Newly hired, terminated or part-time employees should be noted accordingly on the QWTS. --Reconciled QWTS should be signed and dated by the employer. --The underwriter may request payroll in questionable situations. --If a QWTS is not available, explain why and provide a copy of payroll records. Seasonal industries, such as lawn and garden services,construction, concrete and paving, golf courses, farm laborers, etc., must provide four consecutive quarters of wage and tax reports to verify consistent, continuous employment of eligible employees. Churches must provide Form 941, including a copy of the payroll records with employee names, wages and hours, which must match the totals on Form 941. Sole proprietors, partners or officers of the business who do not appear on the QWTS should submit one of the following identified documents. This list is not all inclusive. The employer may provide any other documentation the Underwriter deems acceptable to establish eligibility. Sole proprietor Franchise Limited liability company (operating as a sole proprietor) Partner Partnership Limited liability partnership Corporate officer Personal service corporation S-corporation Corporate officer C-corporation Limited liability company (LLC) operating as C-corp IRS Form 1040 along with Schedule C (Form 1040) IRS Form 1040 along with Schedule SE (Form 1040) IRS Form 1040 along with Schedule F (Form 1040) IRS Form 1040 along with Schedule K-1 (Form 1065) Any other documentation the owner would like to provide to help determine eligibility IRS Form 1065 (Schedule K-1) IRS Form 1120 S (Schedule K-1) along with Schedule E (Form 1040) Partnership agreement if established within two years eligible partners must be listed on agreement Any other documentation the owner would like to provide to help determine eligibility IRS Form 1120 S (Schedule K-1) along with Schedule E (Form 1040) IRS Form 1120 W (personal service corp) IRS Form 1040 ES (Estimated Tax) (S-corp) IRS Form 8832 (Entity classification as a corporation) W-2 Articles of incorporation if established within two years - corporate officers must be listed Any other documentation the owner would like to provide to help determine eligibility If the officers/owners are on the QWTS, no additional documents are needed (corporation income tax return) 1120A (corporation short-form income tax return) Articles of incorporation if established within two years - corporate officers must be listed Any other documentation the owners would like to provide to help determine eligibility 14

15 Tax Documents 10 to 50 ENROLLED Employees with Prior Coverage Total Average Employees Two or More Companies Affiliated, Associated or Multiple Companies, Common Ownership No documentation is required QWTS or prior carrier bill is not needed. Upon request, the underwriter will contact the broker if a QWTS is necessary. For new business sold cases, be sure and answer the question on the employer application. If you have questions, please refer to the Addendum to New Business Input Document (total average employee form) available in Producer World index-smallgroup.html. Employers who have more than one business with different TINs may be eligible to enroll as one group if the following are met: One owner has controlling interest of all businesses to be included; or The owner files (or is eligible to file) an Affiliations Schedule, IRS Form 851, a combined tax return for all companies to be included. If they are eligible but choose not to file Form 851, please indicate as such. A copy of the latest filed tax return must be provided; and All businesses filed under one combined tax return must be enrolled as one group. For example, if the employer has three businesses and files all three under one combined tax return, then all three businesses must be enrolled for coverage. If the request is for only two of the three businesses to be enrolled, the group will be considered a carve-out. The enrolling business (the group that is being used as the policy name), as well as the other businesses to be combined, must have the minimum number of employees required by the state. There are 50 or fewer employees in the combined employer groups. Businesses with equal controlling interest may be considered, if the owners of the company designate an individual to act on behalf of all the groups. Underwriting reserves the right to final underwriting review and may consider common ownership on a case-by-case basis. Example One owner has controlling interest of all companies to be included: Company 1 Jim owns 75 percent and Jack owns 25 percent Company 2 Jim owns 55 percent and Jack owns 45 percent Both companies can be written as one group since Jim has controlling interest in both Vision Available to groups with two or more eligible employees. No minimum participation or contribution. The employer may only offer one vision plan to all employees. To enroll, submit a list of employees and dependents with vision plan indicated. The list can be sent via , Word doc, Excel spreadsheet or EList. You can also mark vision on the employee application. The initial premium can be included with payment for medical, dental or life, or can be separate. Waivers are not needed as participation is not required. 15

16 Waiting Period At initial submission of the group, the benefit waiting period (BWP) may be waived for current employees upon the employer s request. This should be checked on the employer application. The BWP for future employees may be the 1 st or 15 th of the month following 0 days, 30 days, 60 days, or exactly 90 days following the date of hire. Date of hire BWP is not available. A change to the BWP may only be made on the plan anniversary date. No retroactive changes will be allowed. One or two BWP may be selected and must be consistently applied within a class of employees as defined by the employer such as management versus non-management, hourly versus salaried, etc. BWP must be consistently applied to all employees, including newly hired key employees. New hires, the eligibility date will be the first day of the policy month following the waiting period, not to exceed 90 calendar days from the date of hire. Policy month refers to the contract effective date of the 1 st or 15 th. --I f 0 days is selected and the employee is hired on the 1 st of the month, the effective date will be the date of hire. --If Exactly 90 Days is selected the enrollment eligibility date will begin 90 calendar days from the date of hire. --If the group has a 15 th of the month bill cycle, the new hire will be effective on the 15 th of the month following date of hire. Examples 1 st of the month following the BWP 15 th of the month following the BWP 0 days Date of hire: 4/1 Effective date: 4/1 0 days Date of hire: 4/18 Effective date: 5/1 30 days Date of hire: 4/18 Effective date: 6/1 60 days Date of hire: 4/18 Effective date: 7/1 Date of hire: 4/1 Effective date: 4/15 Date of hire: 4/18 Effective date: 5/15 Date of hire: 4/18 Effective date: 6/15 Date of hire: 4/18 Effective date: 7/15 90 days exact Date of hire: 4/18 Effective date: 7/16 not 8/1 exactly 90 days from the date of hire Date of hire: 4/18 Effective date: 7/16 not 8/15 exactly 90 days from the date of hire 16

17 Dental Coverage Waiting Period Contributory (non-voluntary) 2 to 9 eligible employees and voluntary 3 to 50 eligible employees PPO and indemnity plans for major and orthodontic services employees must be an enrolled member of the employer s plan for one year before becoming eligible. Ortho is only available to groups with 10 or more employees. DMO there is no waiting period. Discount plans do not qualify as previous coverage. Future hires waiting period applies regardless if takeover for voluntary. Virgin group (no prior coverage) the waiting periods apply to employees at case inception as well as any future hires. Takeover/replacement cases (prior coverage) you must provide a copy of the last billing statement and schedule of benefits in order to provide credit. If a group s prior coverage did not lapse more than 90 days prior, the waiting periods are waived. In order for the waiting period to be waived, the group must have had a dental plan in place that covered major (and orthodontia, if applicable) immediately preceding our takeover of the business. Example Prior major coverage but no orthodontia coverage Aetna plan has coverage for both major and orthodontia The waiting period is waived for major services but not for orthodontia services Contributory (non-voluntary) 10 to 50 eligible employees No waiting period. Creditable Prior Coverage Voluntary plans Plans that cover preventive and basic services will satisfy our requirements for having prior creditable coverage as long as the member was covered for 12 months under a dental plan within the last 90 days that included both preventive and basic coverage. You must provide a copy of the schedule of benefits to receive credit. Preventive only or discount plans do not meet the requirements for having prior creditable coverage. These groups will continue to be written has having no prior coverage. 17

18 Dental Ineligible Industries All industries are eligible if sold with medical. The following industries are not eligible when dental is sold stand-alone or packaged only with life Bowling Centers Physical Fitness Facilities Business Associations Private Households Dance Studios, Schools Professional Membership Organizations, Labor Unions, Civic Social and Fraternal Orgs, Political Orgs Employment Agencies Professional Sports Clubs & Producers, Race Tracks Miscellaneous Amusement/ Recreation Public Golf Courses, Amusements, Membership Sports & Recreation Clubs Miscellaneous Membership Org Religious Organizations Miscellaneous Services Theatrical Producers, Bands, Orchestras, Actors Open Enrollment An open enrollment is a period when any employee can elect to join the dental plan without penalty, regardless if they previously declined coverage during the first 31 days of initial eligibility. Contributory (non-voluntary) plans with medical or standalone 2 to 9 eligible employees no open enrollment. 10 to 50 eligible employees employees/dependents who do not enroll when initially eligible are now eligible to enroll during a subsequent open enrollment period without being subject to the late entrant provision. Voluntary plans with medical or standalone No open enrollment. Product Packaging Voluntary Reinstatement (applies to voluntary plans only) Refer to the Plan Guide dental footnotes page for plan availability. Members once enrolled who have previously terminated their coverage by discontinuing their contributions may not re-enroll for a period of 24 months. All coverage rules will apply from the new effective date including, but not limited to, the coverage waiting period. 18

19 Life and disability Actively-at-Work Continuity of Coverage (no loss/no gain) Evidence of Insurability (EOI) Employees who are both disabled and away from work on the date their insurance would otherwise become effective will become insured on the date they return to active full time work one full day. The employee will not lose coverage due to a change in carriers. This protects employees who are not actively at work during a change in insurance carriers. If an employee is not actively at work, we will waive the actively-at-work requirement and provide coverage for a maximum of 12 months from the policy effective date, except no benefits are payable if the prior plan is liable. If the employee has not returned to active work before the end of the 12-month period, conversion must be offered. EOI means the person must complete an individual health statement and may have to submit medical records at their expense. EOI is required when one or more of the following conditions exist: 1. Life insurance coverage amounts requested are above the guaranteed standard issue limit. 2. Late entrant coverage is not requested within 31 days of eligibility for contributory coverage. 3. New coverage is requested during the anniversary period. 4. Coverage is requested outside of the employer s anniversary period due to qualifying life event (that is, marriage, divorce, newborn child, adoption, loss of spousal coverage, etc.). 5. Reinstatement or restoration of coverage is requested. 6. Dependent coverage option was initially refused by employee but requested later. The dependent would be considered a late entrant and subject to EOI, and may be declined for medical reasons. 7. Requesting life or disability at the individual level and they are a late enrollee even if enrolling on the case anniversary date. Late enrollees are not eligible for the guaranteed issue limit. Example Group has $50,000 life with $20,000 guaranteed issue limit Late enrollee enrolling for $50,000 would not automatically get the $20,000 Since the applicant is late, he or she must medically qualify for the entire $50,000 Guaranteed Issue Coverage Job Classification (Position) Schedules We provide certain amounts of life insurance to all timely entrants without requiring an employee to answer any medical questions. These insurance amounts are called guaranteed issue. Employees wishing to obtain increased insurance amounts will be required to submit evidence of insurability, which means they must complete a medical questionnaire and may be required to provide medical records. On-time enrollees who do not meet the requirements of evidence of insurability will receive the guaranteed issue life amount. Late enrollees must qualify for the entire amount and are not guaranteed any coverage. Varying levels of coverage based on job classifications are available for groups with 10 or more lives. Up to three separate classes are allowed (with a minimum requirement of three employees in each class). Items such as probationary periods must be applied consistently within a class of employee. The benefit for the class with the richest benefit must not be greater than five times the benefit of the class with the lowest benefit even if only two classes are offered. Position/job class Basic term life amount Disability Packaged life & disability Executives $50,000 Flat $500 High option Managers, supervisors $20,000 Flat $300 Medium option All other employees $10,000 Flat $200 Low option 19

20 Life and disability Ineligible Industries Packaged life and disability ineligible industries (only with no medical coverage) 2 50 eligible employees Description SIC code(s) Description SIC code(s) Asbestos Products Motion Picture/Amusement & Recreation Automotive Repairs/Services Nonclassifiable Establishments 9999 Doctor s Offices Clinics Primary Metal Industries Explosives, Bombs & Pyrotechnics Real Estate Agents 6531 Fire Arms & Ammunition Security Brokers 6211 Liquor Stores 5921 Service Detective Services 7381 Membership Associations Service Private Household Mining Life simplified plans eligible employees Description SIC code(s) Description SIC code(s) Hunting, Trapping & Game Propagation 971 Fire Arms & Ammunition Mining Metal Trucking & Courier Services, except Air Mining Coal Transportation Water/Air Mining Oil and Gas Detective, Guard & Armored Car Service 7381 Mining Nonmetallic Minerals, Except Fuels Amusement Parks 7996 Manufacturing Logging & Sawmills Memberships Sports and Recreation Clubs 7997 Manufacturing Industrial Inorganic Chemicals Manufacturing Fertilizers/ Pesticides/Explosives County/Cities/Municipalities Public Order and Safety

21 Life and disability Ineligible Industries (continued) Manufacturing Lime/ Gypsum/Stone Products National Security 9711 Asbestos Products Nonclassifiable Establishments 9999 Short term and long term disability ineligible industries eligible employees Description SIC code(s) Description SIC code(s) Agriculture, Forestry, Fishing Transportation Water/Air Mining Transportation Services General Building Contractors Residential Sanitary Services Highway & Street Construction 1611 Automotive Dealers & Gasoline Stations Bridge Tunnel & Elevated Highway Liquor Stores 5921 Roofing, Siding, Sheet Metal 1761 Fuel Dealers Concrete Work 1771 Security/Commodity Brokers & Dealers Construction Special Trade Contractors 1791 Real Estate Agents and Managers 6531 Excavation Work 1794 Hotels, Rooming Houses, Camps Wrecking and Demolition Work 1795 Laundry, Cleaning & Garment Services Meat Processing Beauty Shops 7231 Manufacturing Tobacco Products Manufacturing Logging & Sawmills Barber Shops Shoe Repair Shops 7251 Pulp Mills 2611 Misc Personal Services 7299 Paper Mills 2621 Services to Dwellings and Other Buildings Paperboard Mills 2631 Detective, Guard & Armored Car Services

22 Life and disability Ineligible Industries (continued) Alkalies & Chlorine 2812 Automotive Repair & Services Industrial Gases 2813 Motion Pictures Manufacturing Fertilizers/ Pesticides/Explosives Amusement & Recreation Services Petroleum Refining Offices & Clinics of Medical Doctors Manufacturing Asbestos Products Skilled Nursing Facilities 8051 Asbestos Products Child Day Care Services 8351 Primary Metal Industries Membership Organizations Nonferrous Foundries Service Private Households 8811 Fire Arms & Ammunition Services NEC 8999 Transportation Railroad County/Cities/Municipalities Transportation Taxicabs/ Buses/Trucking National Security 9711 US Postal Service 4311 Nonclassifiable Establishments