Texas underwriting brochure

Transcription

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

2 Underwriting guidelines For businesses with 2 to 100 employees 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, HIPAA, and ACA, take precedence over any and all underwriting rules. Exceptions to underwriting rules require approval of the regional underwriting director, 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 May be written on a stand-alone basis or with ancillary coverage. Only non-occupational injuries and disease will be covered. 24-hour coverage is available for owners, officers and partners. Dental 2 employees Standard dental available with medical. Voluntary dental not available. 3 to 100 employees Standard dental, voluntary dental and stand-alone dental available with or without medical. Stand-alone dental has ineligible industries that are listed separately under the SIC code section of the guidelines. Retirees (51 to 100 employees) Standard plans can comprise no more than 10 percent of the group. Voluntary plans not eligible. Orthodontic coverage Available with 10 or more employees with a minimum of five enrolled employees and applies to dependent children only. Child orthodontic or adult and child orthodontic is available for certain plans. See dental footnotes in the Plan Guide for more information. 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 disability 2 to 9 employees available if packaged with medical. 26 to 50 employees available if packaged with medical or dental, or a stand-alone basis. 51 to 100 employees see the Plan Guide for more information. Health/dental benefits plans, health/dental insurance plans, life insurance and disability insurance plans/policies are offered, underwritten or administered by Aetna Health Inc., Aetna Dental Inc. Aetna Health Insurance Company 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 Packaged life and disability 2 to 50 employees available if packaged with medical. 10 to 50 employees available 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 and disability insurance even if they do not elect medical coverage. All new business submissions must be received by Aetna Underwriting on or before the requested effective date. If not received by this date, the effective date may be moved to the next month, with potential rate impact. Census data must be provided on all employees, including enrolled, waivers and COBRA or state continuation employees. Include name, date of birth, date of hire, gender, dependent status, residence ZIP code and the physical employee work location ZIP code. 2 to 50 employees also provide the date of birth for each enrolling employee, spouse and/or child. 51 to 100 employees This must be provided in Excel format. Sold groups may submit this through EList. Retirees 2 to 50 employees retirees are not eligible. 51 to 100 employees retirees are eligible. A high percent of retirees may result in an additional rate up. Census should be split for over and under age 65. Retirees are not eligible for life, disability or voluntary dental coverage. Standard dental limited to 10 percent of active enrollment. COBRA/State Continuation 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. Employers with 20 or more employees, both full and part time, are required to offer COBRA coverage. Employers with less than 20 full-time and part-time employees are required to offer state continuation. COBRA applies to employers with 20 or more employees on more than 50 percent of its typical business days in the previous calendar year. Includes: full-time, part-time, seasonal, temporary, union, owners, partners, officers Excludes: 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 a part-time employee worked divided by the hours an employee must work to be considered full time 3

4 COBRA/State Continuation (continued) Deductible Credit Dependent Eligibility Companies under common ownership are included in the count. COBRA continuees who do not reside in an Aetna service area are only eligible for out-of-network benefits if applicable; or urgent/emergency care. COBRA enrollees are not billed separately and are included with the group bill. State continuation is billed separately, directly to the individual. Life, disability and/or voluntary dental: COBRA/state continuation enrollees are not eligible. Provide the qualifying event, length, start date and end date. 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 according to the law applicable to the group, COBRA/state continuation enrollees can be included for coverage subject to normal underwriting guidelines. 51 to 100 employees COBRA/state continuation enrollees are included in the medical underwriting of the group Health information must be provided on COBRA/state continuation enrollees along with the rest of the group Deductible credit applies to group-to-group takeover for individuals on the prior group plan. Employees who are eligible and want to receive credit for the deductible paid to the prior carrier should submit a copy of the Explanation of Benefits (EOBs) no later than 90 days after the effective date to Aetna. Be sure the member s Social Security number is on the EOB. If a current carrier report is being submitted for credit, be sure it includes the Social Security numbers. EOBs may be submitted with the initial submission, with the first claim, or can be faxed to claims at no later than 90 days after the effective date. If faxed, please include ECHS Category: SFRE in the subject line with the group/control number in order to direct the information to the correct area for processing. Deductible carryover not allowed. Deductible credit applies to calendar-year plans. Not available on plan-year plans. Spouse/domestic partner if both employee and spouse/partner work for the same company, they may enroll together or separately. Dependent children: Medical and dental: Dependent children are eligible as defined in the plan documents and in accordance with state and federal law, for medical and dental coverage up to the end of the month turning 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. Grandchildren are eligible if court ordered. A copy of the court order must be submitted. 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. Children eligible for coverage through both parents cannot be covered by both parents under the same plan. - - Incapacitated child: Attainment of limiting age will not terminate the coverage of the child while the child is and continues to be both incapable of self-sustaining employment by reason of mental retardation or physical handicap and chiefly dependent on the employee or member for support and maintenance. The employee or member must provide proof of incapacity and dependency within 31 days of the child s attainment of the limiting age and subsequently as we may require, but not more frequently than annually after the two-year period following the child s attainment of the limiting age. 4

5 Dependent Eligibility (continued) Dual and Triple Option (Medical only) Effective Date For medical and dental, dependents must enroll in the same benefits as the employee (participation is not required). Employees may select coverage for eligible dependents under the dental plan even if they select single coverage under the medical plan. Dependent life: Dependent children are eligible from birth up to their 26 th birthday. 2 to 9 eligible employees: dependents are not eligible for life and disability. Savings Plus plans cannot be offered with a similar non-savings plus plan. Aetna Whole Health plans cannot be offered with a Savings Plus plan but can be offered with a regular OAMC plan. Zero member enrollment plans are available upon request. The effective date requested by the employer may be up to 60 days in advance. 2 to 50 the effective date must be the 1 st or the 15 th of the month. 51 to 100 the effective date must be the 1 st of the month. Electronic Funds Transfer (EFT) Employee Eligibility 2 to 50 Employees Payment for the first month s premium at new business can be processed through an electronic funds transfer (EFT). Once the group is issued, customers can pay their monthly premiums online or by calling , using their checking account and routing number. There is no extra charge for this service. Eligible employee means an employee who works on a full-time basis and who usually works at least 30 hours a week. The term includes a sole proprietor, a partner, and an independent contractor, if the individual is included as an employee under a health benefit plan of a small or large employer. The term does not include an employee who: Works on a part-time, temporary, seasonal, or substitute basis; Is covered under: Another health benefit plan; or A self-funded or self-insured employee welfare benefit plan that provides health benefits and is established in accordance with the Employee Retirement Income Security Act of 1974 (29 U.S.C. Section 1001 et seq.); or Elects not to be covered under the employer s health benefits plan and is covered under: The Medicaid program; Another federal program, including the CHAMPUS program or Medicare program; or A benefit plan established in another country. Employees are eligible to enroll in the dental plan even if they do not select medical coverage and vice versa. Employee Eligibility 51 to 100 Employees Employee means an individual employed by an employer (both full and part time). An employer may cover employees working a minimum 25+ hours. This should be noted on the employer application. Ineligible employees include: 1099 independent contractors, directors, stockholders, or other outside consultants who are not active, permanent full-time employees. 5

6 Employer Contribution Medical 2 to 50 employees 50 percent of the employee-only cost of the plan. Groups that do not meet the contribution guideline are eligible to enroll during open enrollment, November 15 through December 15, for a January 1 effective date. 51 to 100 employees 75 percent of the employee-only cost or 50 percent of the total cost of the plan. Dental 2 to 50 eligible employees Employer must contribute at least 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. 51 to 100 eligible employees Standard plans employer must contribute. Excludes employee pay all plans. Voluntary plans 100 percent employee paid. Life 2 to 9 eligible employees 100 percent of the total cost of the life and/or disability coverage. 10 to 50 eligible employees 50 to 100 percent. 51 to 100 eligible employees See the Plan Guide for more information. 2 to 50 plans Coverage can be denied based on inadequate contributions. Employer Definition (2 to 50 eligible employees) Employer Eligibility Excluded Class/ Carve Outs Small employer means a person who employed an average of at least two employees but not more than 50 employees on business days during the preceding calendar year and who employs at least two employees on the first day of the plan year. The term includes a governmental entity subject to Article , , or , to Subchapter C, Chapter 1364, to Chapter 1578, or to Chapter 177, local government code, that otherwise meets the requirements of this subdivision. For purposes of this definition, a partnership is the employer of a partner. 2 to 50 eligible employees - two individuals who are married must submit evidence to establish each individual s status as an eligible employee. 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 employer organizations (PEOs)/employee leasing firms, and closed groups are not eligible. Medical Union employees are the only class of employees that may be excluded. Dental, life and disability Union employees if packaged with medical. 6

7 Initial Premium Late Applicants The initial premium is not a binder check and does not bind Aetna to provide coverage. If the group is currently with Aetna and adding medical, dental, life, disability, or vision coverage, no premium check is required. The initial premium should be the total of the first month s premium for all products 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 Inc. or complete the EFT form 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, the initial premium will be withdrawn from the checking account when the group is approved. This is a one-time authorization for the first month s premium only. If the request for coverage is withdrawn or denied due to business ineligibility, the premium will be returned to the employer. If the initial premium check is returned by the bank for nonsufficient funds, the standard termination process will be followed. 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 be added. However, if each spouse has different open enrollment dates and drops coverage during their annual open enrollment period, the spouse is eligible to enroll. Medical Late applicants without a qualifying life event (that is, marriage, divorce, newborn child, adoption, loss of spousal coverage, etc.) are not allowed. They 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 and disability 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 7

8 Licensed, Appointed Producers Medical Underwriting (51 to 100 employees) Medicare (MSP) for CMS Reporting Municipalities and Townships (2 to 50 employees) 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 get appointed with Aetna go to and click Start Working with Aetna. The most recent HB 2015 claims experience is required. Provide current and renewal rates along with plan designs. If AccuRate is used, provide member level census (there must be a minimum of 25 enrolled members). Be sure to provide member level census and include first name, last name, date of birth, and gender for all employees and dependents, along with residence ZIP code. Groups with existing medical coverage, not using AccuRate, the employer must complete a group medical questionnaire (GMQ) and the group may be rated up. Virgin groups seeking coverage for the first time may be required to provide individual health statements and may be rated up. AccuRate is another option for virgin groups with specific criteria that must be met. See your Aetna sales associate for more details. Medical conditions of COBRA/state continuation enrollees are included in this rating calculation. Prior Aetna coverage medical claims may be reviewed for any individuals who had prior Aetna coverage and used along with the health information included on the employee application(s) and/ or group medical questionnaire, and included in the overall medical assessment of the group. Each year, all carriers must report to CMS (Centers for Medicare and Medicaid Services) the number of Medicare secondary payer (MSP) groups and the number of employees, based on the number of employees provided by the employer. MSP is the term used when Medicare is not responsible for paying first. The Aetna plan would pay primary to Medicare for active employees and would pay first when there are 20 or more total employees for 20 or more weeks during the current or prior calendar year. Includes: full-time, part-time, seasonal, temporary, union, owners, partners, officers Excludes: 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. In most countries a municipality is the smallest administrative subdivision to have its own democratically elected officials. Underwriting requirements Quarterly wage and tax statement (QWTS) is required. 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 and must provide a copy of their 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 and participation will be maintained. 8

9 Newly Formed Business (in operation less than three months) A newly formed group must provide the following documents: 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 ID number; and Quarterly wage and tax statement. If not available, provide the date when one will be filed; and The two most recent payroll records that include hours worked, taxes withheld, check number and wages earned; or A letter from a CPA with the following information: 1. A list of all employees, to include owners, partners, officers (full time 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 51 to 100 employees subject to medical underwriting Out-of-State (OOS) Employees Medical Any active employee who lives in a state other than where the company is domiciled is considered an out-of-state (OOS) employee, and will be issued an appropriate plan. OOS employees must be enrolled in an Aetna Open Access Managed Choice or PPO plan if available; otherwise, an indemnity plan. PPO is not available in North Dakota. Health coverage is not available in Hawaii or Vermont. Louisiana residents 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 additional Louisiana employer and employee applications to be completed. Dental Members who reside OOS will receive the same plan as in-state members (based on state rules and network availability). This applies to DMO, PPO and FOC Dental plans. If an OOS member resides in a state that does not allow the in-state plan those members will be placed into an available PPO or indemnity Plan. Life and disability OOS employees are eligible for the same plan selected by the employer. 9

10 Participation Medical Noncontributory plans (Employer pay all) 100 percent participation is required. Contributory plans 2 employees 100 percent of employees must participate in our plan. 3 to 50 employees 75 percent participation excluding valid waivers must enroll in our plan, rounding down. 2 to 50 employees groups that do not meet the participation guideline are eligible to enroll during open enrollment, November 15 through December 15, for a January 1 effective date. 51 to 100 employees 75 percent participation excluding valid waivers and a minimum of 50 percent of the total full-time employees regardless of valid waivers. Groups that do not meet this guideline may have an additional factor applied. Valid waivers include: Spousal/parental group coverage Medicare/Medicaid Champus/ChampVA Military coverage Individual coverage (on or off exchange) -Retiree - coverage Association coverage (for doctors/lawyers covered under an association who want to cover their employees) Invalid waivers include: Student health Another employer sponsored health plan and will count toward the participation Participation Dental Noncontributory plans (employer pay all) 100 percent participation excluding valid waivers with a minimum of two enrolled Contributory plans with medical or stand-alone plans (round to the nearest whole number) Standard 2 to 3 employees 100 percent excluding valid waivers with a minimum of two enrolled 4 to 50 employees 75 percent excluding valid waivers. A minimum of two and 50 percent of total employees must enroll in the dental plan 51 to 100 employees 30 percent excluding valid waivers Voluntary 3 to 100 employees 30 percent participation excluding valid waivers Minimum of three must enroll If a group does not qualify for a standard plan and has 30 percent or more participation then group qualifies for voluntary Voluntary and stand-alone plans Employees may select coverage for 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 Valid Waivers Spousal/ parental group coverage Champus/ChampVA military coverage Retiree coverage Association coverage (for doctors/lawyers covered under an association who want to cover their employees) 10

11 Participation Life and Disability 2 to 9 employees 100 percent participation is required. 10 to 50 employees Noncontributory (employer pay all) 100 percent participation is required. Contributory 75 percent participation is required. 51 to 100 employees See the Plan Guide for more information. 2 to 50 employees COBRA and state continuation employees are not eligible. Retirees are not eligible. Employees may elect life insurance even if they do not elect medical coverage and the group must meet the required participation percentage. If not, then life insurance will be declined for the group. Coverage can be denied based on inadequate participation. Plan Change (Group Level) Medical Groups can change plans on the plan anniversary date only. Dental The future renewal date of the change will be the same as the medical plan anniversary date. Life and disability 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. Plan Change (Employee Level) Medical Employees are not eligible to change plans until the group s open enrollment period, which is upon their annual renewal (except for qualified special enrollment events). Dental Freedom-of-Choice Plan May change from DMO to PPO and vice versa at any time. Life and disability Employees are not eligible to change plans until the group s open enrollment period, which is upon their annual renewal (except for qualified special enrollment events). PEO (Professional Employer Organization) Groups Covered Under a PEO Prior Aetna Coverage Groups currently with a PEO may be eligible, as long as the PEO provides payroll specific to our group and we can determine the group size. Even though the group may be reported under the PEO Tax ID, the group may be considered, subject to underwriting approval. A letter of intent is not needed. Groups that we have terminated for nonpayment must pay all premiums owed before a new plan will be issued. 51 to 100 employees subject to medical underwriting. Medical claims may be reviewed for any individuals who had prior Aetna coverage. 11

12 Rates Medical 2 to 9 employees tabular/age banded. Rates are member rated based on each member s date of birth. 10 to 100 employees four-tier composite rates. New business groups may be re-rated if enrollment changes by more than +/- 10 percent from the initial quote. 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 the case submission/ installation, including but not limited to any change in census. Dental Four-tier composite rating applies. Life and disability Life/AD&D tabular rates apply. Life and disability packaged plan: per employee per month rate. Retirees Replacing Other Group Coverage Signature Dates Spin-Off Groups (current Aetna customers leaving an Aetna group only) Standard Industrial Classification (SIC) Codes 2 to 50 employees retiree coverage is not available. 51 to 100 employees. Retirees are eligible for medical coverage. A high percent of retirees may result in an additional rate up. The retiree must be currently covered with present carrier (must be shown on the bill roster or provide a copy of the ID card). If there were no retirees covered by the prior carrier the retiree must be covered as an employee on the bill roster. Retirees are not included in the total count to determine the case size. Retirees are not eligible for life, disability or voluntary dental coverage. Standard dental retirees cannot comprise more than 10 percent of the group. Do not cancel any existing coverage until they have been notified of approval from the Aetna Underwriting Unit group size provide a copy of the current billing statement that includes the account summary. Dental provide the benefit summary to receive credit for: Major and orthodontic coverage for standard 2 to 9 eligible employees and voluntary 3 to 100 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 employee himself/herself. We will consider the group with the following documentation: 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 they are spinning off from. 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. Medical All industries are eligible. 12

13 Tax Documents 2 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 employees, terminated and 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. 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. Nonprofit groups may provide payroll documents as long as they also submit the appropriate form detailing their nonprofit status. Sole proprietors, partners, corporate officers not listed on the QWTS are required to submit one of the following identified documents. This list is not all-inclusive. The employer may also provide any additional documentation to establish eligibility. Sole proprietor Franchise Limited liability company (operating as a sole proprietor) Partner Partnership Limited liability partnership Corporate officer S-Corporation Corporate officer C-Corporation Limited liability company (LLC) operating as C Corp Corporate officer Personal service corporation IRS Form 1040 along with Schedule C IRS Form 1040 along with Schedule SE IRS Form 1040 along with Schedule F 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 (IRS Form 1040) Partnership agreement if established within two years listing eligible partners 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 1040 ES (estimated tax) (S-Corp) Articles of Incorporation if established within two years listing corporate officers Any other documentation the owner would like to provide to help determine eligibility If the officers/owners are on the quarterly wage and tax statement, no additional documents are needed 1120 (corporation income tax return) 1120 A (corporation short-form income tax return) Articles of Incorporation if established within two years listing corporate officers Any other documentation the owners would like to provide to help determine eligibility IRS Form 1120 W (personal service c`orp) Articles of Incorporation if established within two years listing corporate officers Any other documentation the owner would like to provide to help determine eligibility 13

14 Tax Documents 10 to 50 Enrolled Employees with Prior Coverage Total Average Employees Two or More Companies Affiliated, Associated or Multiple Companies, Common Ownership Vision 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 employer-plans/small-business/index-smallgroup.html. Employers who have more than one business with different tax identification numbers (TINs) may be eligible to enroll as one group if the following are met: One owner has controlling interest of all business 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 and provide a copy of the latest tax return. All businesses filed under one combined tax return will be considered a single 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 100 or fewer employees in the combined employer groups. 51 to 100 employees the two or more groups may have multiple Standard Industrial Classification (SIC) codes; however, rates will be based on the SIC code for the group with the majority of employees. A completed Common Ownership form is submitted. 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 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 51 percent and Jack owns 49 percent Both companies can be written as one group since Jim has controlling interest in both Available to groups with two or more eligible employees. No minimum participation or contribution required. 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 by , 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. License and appointment there is no special license. Once the broker is licensed and appointed to sell ALIC, they can sell all products that fall under that umbrella. 14

15 Waiting Period At initial group submission, the benefit waiting period (BWP) may be waived at 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 employee s date of hire. Policy month refers to the contract effective date of the 1 st or 15 th (15 th not available for 51 to 100 size groups). If 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. 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. BWPs must be consistently applied to all employees, including newly hired key employees. One or two BWPs 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. Examples 1 st of the month following the BWP 15 th of the month following the BWP 2-50 size groups only 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 15

16 Dental Coverage Waiting Period Standard 2 to 9 employees and voluntary 3 to 100 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. If a group s prior coverage did not lapse more than 90 days, 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 orthodontic, if applicable) immediately before our takeover of the business. Example Prior major coverage but no orthodontic coverage Aetna plan has coverage for both major and orthodontic The waiting period is waived for major services but not for orthodontic services Standard 10 to 100 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. 16

17 Dental Ineligible Industries All industries are eligible if sold with medical. 2 to 100 employees 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 Organizations, Political Organizations 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. Standard plans with medical or stand-alone 2 to 9 employees no open enrollment. 10 to 100 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 stand-alone 2 to 100 employees no open enrollment. Option Sales Product Packaging Reinstatement (applies to voluntary plans only) Option sales alongside another dental carrier are not allowed. All dental plans must be sold on a full-replacement basis. 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. 17

18 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. Evidence of insurability (EOI) means the person must complete an individual health statement and may also have to submit medical evidence via medical records at their expense. EOI is required when one or more of the following conditions exist: Life insurance coverage amounts requested are above the guarantee issue (GI) amount. Late enrollee coverage is not requested within 31 days of eligibility for contributory coverage. New coverage is requested during the anniversary period. 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.) Reinstatement or restoration of coverage is requested. 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. Life and disability is requested at the individual level for a late enrollee even if enrolling on the case anniversary date. Late enrollees are not eligible for the guarantee issue limit. Example Group has $50,000 life with $20,000 guarantee 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 18

19 Life and disability Guarantee Issue (GI) Coverage Ineligible Industries 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 (EOI), 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 EOI will receive the GI life amount. Late enrollees must qualify for the entire amount and are not guaranteed any coverage. Packaged life and disability ineligible industries 2 to 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

20 Life and disability Ineligible Industries (continued) Life simplified plans eligible employees Life simplified expanded 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 & Recreation Clubs 7997 Manufacturing Industrial Inorganic Chemicals Manufacturing Fertilizers/ Pesticides/Explosives Manufacturing Lime/Gypsum/ Stone Products County/Cities/Municipalities Public Order and Safety National Security 9711 Asbestos Products Nonclassifiable Establishments

21 Life and disability Ineligible Industries (continued) Short-term and long-term disability simplified plans eligible employees Short-term and long-term disability simplified expanded plans eligible employees Description SIC code(s) Description SIC code(s) Agriculture, Forestry, Fishing Petroleum Refining Mining Manufacturing Asbestos Products General Building Contractors Residential Asbestos Products Highway & Street Construction 1611 Primary Metal Industries Bridge Tunnel & Elevated Highway Nonferrous Foundries Roofing, Siding, Sheet Metal 1761 Fire Arms & Ammunition Concrete Work 1771 Transportation Railroad Construction Special Trade Contractors 1791 Transportation Taxicabs/ Buses/Trucking Excavation Work 1794 US Postal Service 4311 Wrecking and Demolition Work 1795 Transportation Water/Air Meat Processing Transportation Services Manufacturing Tobacco Products Sanitary Services Manufacturing Logging & Sawmills Automotive Dealers & Gasoline Stations Pulp Mills 2611 Liquor Stores 5921 Paper Mills 2621 Fuel Dealers Paperboard Mills 2631 Security/Commodity Brokers & Dealers Alkalies & Chlorine 2812 Real Estate Agents and Managers Industrial Gases 2813 Hotels, Rooming Houses, Camps Manufacturing Fertilizers/ Pesticides/Explosives Laundry, Cleaning & Garment Services

22 Life and disability Ineligible Industries (continued) Short-term and long-term disability simplified plans eligible employees Short-term and long-term disability simplified expanded plans eligible employees (continued) Description SIC code(s) Description SIC code(s) Beauty Shops 7231 Offices & Clinics of Medical Doctors Barber Shops 7241 Skilled Nursing Facilities 8051 Shoe Repair Shops 7251 Child Day Care Services 8351 Misc Personal Services 7299 Membership Organizations Services to Dwellings & Other Buildings Detective, Guard & Armored Car Services Service Private Households Services NEC 8999 Automotive Repair & Services County/Cities/Municipalities * Motion Pictures National Security 9711 Amusement & Recreation Services Nonclassifiable Establishments 9999 Job Classification (Position Schedules) 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. For example, a schedule may be structured as follows: 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 * eligible employees: if police and fire staff are 20 percent or less of the group, then Disability quote will be completed. 22