North Carolina underwriting brochure

Transcription

1 Quality health plans & benefits Healthier living Financial well-being Intelligent solutions North Carolina underwriting brochure Plans effective January 1, 2015 For businesses with employees NC A (9/14)

2 Underwriting guidelines This material is intended for brokers and agents and is for informational purposes only. It is not intended to be all inclusive. Other policies and guidelines may apply. Note: State and federal legislation/regulations, including Small Group Reform and 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 1 to 100 employees all products including basic and standard plans may be written standalone or with ancillary coverage. Only non-occupational injuries and disease will be covered. 24-hour coverage is available for owners, officers and partners. Dental 1 life Dental not available. 2 eligible employees Standard all plans are available if packaged with medical. Voluntary not available. Orthodontic coverage not available. 3 to 100 eligible employees Standard and voluntary plans are available. Voluntary dual option plans are not permitted. Standalone plans are available. Standalone dental has ineligible industries. Retirees (51 to 100 eligible employees) Standard plans retirees can comprise no more than 10 percent of the group. Voluntary plans retirees are not eligible. Orthodontic coverage Available to dependent children only for groups of 10 or more eligible employees with a minimum of five enrolled employees for both standard and voluntary plans. 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. Health benefits and health insurance, dental insurance, life insurance, and disability insurance plans/policies are offered, underwritten, and/or administered by Aetna Health Inc., Aetna Health Insurance Company and/or Aetna Life Insurance Company (Aetna). Each insurer has sole financial responsibility of its own products.

3 Product Availability (continued) Case Submission Dates Census Data Life and disability 2 to 50 eligible employees QRS Standard Life, STD and Packaged plans 2 to 9 eligible employees if packaged with medical 10 to 25 eligible employees if packaged with medical or dental 10 to 50 eligible employees stand alone packaged plans 26 to 50 eligible employees on a stand-alone basis STD and Life plans can be purchased together but cannot be purchased in addition to Packaged Life/Disability plans 10 to 50 eligible employees Life, STD and LTD Simplified plans 10 to 25 if packaged with medical 26 to 50 on a stand-alone basis 51 to 100 eligible employees Life, STD and LTD Simplified Expanded plans 51 to 100 on a stand-alone basis 1 to 3 employees all new business case submissions must be received by Aetna Underwriting 30 calendar days before the requested effective date. If not received by this date, the effective date may be moved to the next available effective date, with a potential rate impact. 4 to 100 employees all new business case submissions must be received by Aetna Underwriting five business days before the requested effective date. If not received by this date, the effective date may be moved to the next available effective date, with a potential rate impact. Member-level census is required for medical and must include first name, last name, date of birth, gender, residence ZIP codes for all employees and dependents including the physical work ZIP code for employees. The census must also include all waivers and COBRA/state continuation enrollees. 1 to 50 employees also include tobacco status for employee, spouse and child age 18 and older, as of the effective date. 51 to 100 employees - the census must be sent in Excel format. 2 to 100 employees - for sold groups EList may be submitted. Retirees 1 to 50 employees retirees are not eligible. 51 to 100 employees Medical retirees are eligible. A high percent of retirees may result in an additional rate up. Dental retirees cannot comprise more than 10 percent of the group. Provide census with retirees split by over and under age 65. 3

4 COBRA and/or State Continuation Consumer Flex Choice (Medical Only) 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. 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 a 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 is billed separately, directly to the individual. COBRA enrollees who do not reside in an Aetna service area are only eligible for out-of-network benefits if applicable or urgent/emergency care. Life, disability and voluntary dental COBRA/state enrollees are not eligible. Eligible enrollees are required to be included on the census. Provide the qualifying event, length, start date and end date. COBRA/State 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 enrollees can be included for coverage subject to normal underwriting guidelines. 51 to 100 eligible employees: COBRA/State enrollees are included in the medical underwriting of the group. Health information must be provided on COBRA/state enrollees along with the rest of the group. A high percent of COBRA continues may result in an additional rate up. New business Employers may select Consumer Flex Choice (all plans), which allows employers to select an unlimited number of plan options within the current product portfolio. Eligibility groups with 4 to 100 employees may participate. Employer contribution the employer is required to contribute a minimum of 50 percent of the employee-only cost of the lowest cost plan in the portfolio. Employee participation: For noncontributory plans, 100 percent participation is required, excluding valid waiver. For contributory plans, 75 percent of eligible employees must enroll, excluding valid waivers. Each plan chosen must have a minimum of one employee enrolled for the plan to be offered and available for newly hired employees, until the employer s next renewal. Renewing business Employer may select Consumer Flex Choice at renewal. Same rules apply as new business. 4

5 Deductible Credit Dependent Eligibility Dual Option/ Triple Option (Medical Only) Effective Date Deductible credit applies to calendar year plans for group-to-group takeover for individuals on the prior group plan. Members who are eligible and want to receive credit for deductibles paid to the prior carrier should submit a copy of the Explanation of Benefits (EOB). The member s Social Security number (SSN) should be included on the EOB; and/or handwrite the SSN on the form to avoid delay. EOBs may be submitted at the initial new business case submission or with the member s first claim, or can be faxed to claims at no later than 90 days after the effective date. For faxes, 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. A member s deductible (medical and pharmacy) paid in the same calendar year will be credited to the new plan s deductible (medical and pharmacy) and out-of-pocket maximum. Deductible credit reports may be submitted and should include the member s Social Security numbers. Deductible carryover not allowed. Spouse if both employee and spouse/partner work for the same company they may enroll together or separately. 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. An affidavit is not required. If the plan sponsor elects to cover domestic partners, the plan sponsor is responsible for determining whether the domestic partner is eligible. Children: Medical and dental: Children are eligible as defined in plan documents in accordance with applicable state and federal laws, up to the end of the month turning 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 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. 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. 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. Dual option limited to any two medical plans for groups with five or more eligible employees. Triple option limited to any three medical plans for 10 or more eligible employees. 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. 5

6 Electronic Funds Transfer (EFT) Employee Eligibility (1 to 50 employees) Payment for the first month s premium for new business can be processed through an electronic funds transfer (EFT)/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. An employee who works for a small employer on a full time basis, with a normal work week of 30 or more hours including a sole proprietor, a partner or a partnership, or an independent contractor, if included as an employee under a health care plan of a small employer. Employees not eligible for coverage include leased, part time, temporary, seasonal or substitute employees, 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. Coverage must be extended to all employees meeting 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 to determine whether or not the group is a small employer, the employer may carve out union employees as an excluded class. Employees are eligible to enroll in the dental plan even if they do not select medical coverage and vice versa. Life and disability QRS Standard Life, STD and Packaged plans 2 to 50 eligible employees - if packaged with medical the minimum hours match medical All other STD, LTD and Life plans 20 hours per week Employee Eligibility (51 to 100 employees) Eligible employees are those who are permanent and work on a full time basis with a normal work week of at least 25 hours, and who have met any authorized waiting period requirements. Ineligible employees include the following: 1099 contractors, directors, stockholders, partners or other outside consultants who are not active, permanent full time employees. Retirees Medical retirees are eligible for medical coverage. A high percent of retirees may result in an additional rate up. Dental retirees cannot comprise more than 10 percent of the group. 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 no retirees were covered by the prior carrier the employee must be covered as an employee on the bill roster. Census required for retirees, split by over and under age 65. Retirees are not eligible for life, disability or voluntary dental coverage. Retirees are not included in the count to determine the case size. Employer Certification The employer must complete the certification form for all groups with 1 to 100 employees indicating whether the group is a small group. 6

7 Employer Contribution Medical 1 to 50 employees The employer must contribute 50 percent of 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. 51 to 100 employees The employer must contribute at least 50 percent of the employee-only coverage. The employer cannot fund the deductible in excess of 50 percent annually whether through an HRA, HSA or any other arrangement or will be subject to an underwriting rating adjustment. Dental 2 to 50 eligible employees The employer must contribute 25 percent of the total cost of the plan or 50 percent of the cost of employee only coverage. 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 plans are 100 percent employee paid. If the employer pays 100 percent the group is not eligible for a voluntary plan and would get a standard plan. Life and disability QRS Standard Life, STD and Packaged plans 2 to 9 eligible employees 100 percent 10 to 50 eligible employees 50 percent to 100 percent Simplified Life, STD and LTD plans 10 to 50 eligible employees 50 to 100 percent Life Simplified Expanded plans 50 to 100 eligible employees 50 to 100 percent Simplified Expanded STD and LTD 51 to 100 eligible employees voluntary 100 percent employee paid 51 to 100 eligible employees noncontributory 100 percent employer paid 2 to 100 eligible employee Coverage can be denied based on inadequate contributions. Employer Definition (1 to 50 employees) Employer Eligibility Small employer means in connection with a group health plan with respect to a calendar year and a plan year, an employer that employed an average of at least one but not more than 50 employees on business days during the preceding calendar year and that employs at least one employee on the first day of the plan year. 1 to 50 employees there must be at least one enrolling W-2 employee who is not an owner and not the owner s spouse. 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. 2 to 50 eligible employees dental, life and disability have ineligible industries. The dental ineligible industry list does not apply when dental is sold in combination with medical. 7

8 Excluded Class/ Carve Outs Medical Union employees are the only class of employees that may be excluded. However, union employees are included in the total count of eligible employees in determining the case size. Management carve outs: 1 to 50 employees not permitted. 51 to 100 employees may be permitted with underwriting management approval. Groups that carve out a specific class of employees for coverage may have an additional factor applied even if standard participation requirements are met. Dental Union employees if packaged with medical. Life and disability Union employees if packaged with medical. Groups Covered Under a PEO (Professional Employer Organization) Initial Premium Late Applicants A group currently with a PEO may be eligible as long as the PEO provides payroll specific for the enrolling group and we can determine the size and eligibility of the group, 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. 51 to 100 employees a group currently with an Aetna PEO should provide members Social Security numbers with the quote request so claims can be reviewed. 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 EFT/ACH form (Aetna form) and include with the new business group enrollment applications. Once coverage is approved, if the check is not submitted, coverage will terminate retroactive to the case effective date. If the EFT/ACH method is selected, we will withdraw the first 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 or withdrawn due to business ineligibility, the premium will be returned to the employer. If the initial premium is returned by the bank for nonsufficient funds, the standard termination process will be followed. If the group is currently with Aetna and adding medical, dental, vision, life and/or disability coverage, no premium payment is required at the time of enrollment. 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. 8

9 Late Applicants (continued) 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 prior to 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 of 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 group s next plan anniversary date 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 Licensed, Appointed Producers Live/Work (medical) Medical Underwriting (51 to 100 eligible 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 employer group being submitted. To become appointed with Aetna go to and click Start Working with Aetna. Live/work rules apply to all plans (medical, dental, life and disability). Product availability is determined by the business location. Individuals residing outside the network area who live within 60 miles of the business location are eligible for the HNOption/MC plan. The employer ZIP code is used to determine the rates as long as the employee s residence ZIP code is within 60 miles of the business location. Individuals residing outside the HNOption/MC area and not within 60 miles of the business location will be issued an indemnity plan. Live/work rules do not apply to individuals working from home. Groups enrolling fewer than 25 members must complete individual health statements. These cases may be rated up. Groups with no health coverage seeking coverage for the first time will be required to provide individual health statements. These cases may be rated up. Medical conditions of COBRA enrollees are included in this rating calculation. 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 included in the overall medical assessment of the group. 9

10 Medicare (MSP) for CMS Reporting Municipalities and Townships (1 to 50 employees) Newly Formed Business (in operation less than three months) 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 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: Requires the same tax documents as noted in the Tax Document section. 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, provide a copy of their prior year W-2. 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 who meet the minimum number of required hours and that minimum participation will be maintained. 1 to 50 employees the following documentation must be provided for consideration: 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 (QWTS) is required. If not available, provide the date when will one be filed; and The two most recent payroll records, which show hours worked, taxes withheld, check number and wages earned; or A letter from the group or 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 6. When a QWTS will be filed 51 to 100 employees groups may be required to complete individual medical questionnaires and may be rated up. 10

11 Option Sales Medical 1 to 50 employees must meet participation rules. Groups that do not meet participation are eligible to enroll during open enrollment, November 15 through December 15, for a January 1 effective date. 51 to 100 employees not allowed. Groups that do not meet participation may have an additional factor applied. 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 and disability Must be written on a full or primary replacement basis. Out-of-State (OOS) Employees (residing outside North Carolina) Medical Employees are eligible for the same life and disability plan selected by the employer. 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 a Louisiana employer application and employee application to be completed. PPO is not available in North Dakota. No indemnity or PPO products are available in Hawaii or Vermont. Dental Members who reside out of state (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 Employees are eligible for the same plan selected by the employer. Participation Medical Noncontributory plans (employer pay all) 100 percent excluding valid waivers. Contributory plans 1 to 3 eligible employees 100 percent excluding valid waivers. 4 to 100 eligible employees 75 percent excluding valid waivers, rounding down. Example 12 minus 3 valid waivers = 9 9 x 75 percent = 6.75 (rounded down) = 6 must enroll 1 to 100 employees All employees waiving coverage must complete the waiver section. Dependent participation is not required. 1 to 50 employees Groups that do not meet participation are eligible to enroll during open enrollment, November 15 through December 15, for a January 1 effective date. 11

12 Participation Medical (continued) 51 to 100 employees Groups that do not meet participation may have an additional factor applied. Waivers 2 to 100 employees Spousal/parental group coverage. Medicare/Medicaid. Champus/ChampVA - military coverage. Retiree coverage. Association coverage (for doctors/lawyers covered under an association who want to cover their employees). Individual coverage (on and off exchange) is not a valid waiver. Participation Dental Noncontributory plans with medical or standalone (employer pay all) 100 percent excluding valid waivers and a minimum of two enrolled. Contributory plans with medical or standalone (round to the nearest whole number) Standard plans 2 to 3 eligible employees 100 percent excluding valid waivers, with a minimum of two enrolled. 4 to 50 eligible employees 75 percent excluding valid waivers. A minimum of two and 50 percent of total eligible employees must enroll in the dental plan. 51 to 100 eligible employees 30 percent excluding valid waivers. Voluntary plans 3 to 100 eligible employees 30 percent excluding valid waivers. Minimum of 3 must enroll. If a group does not qualify for a standard plan and has 30 percent or more participation, then group qualifies for voluntary. Valid waivers Spousal group coverage. Champus/ChampVA - military coverage. Retiree coverage through a previous employer. Association coverage (for doctors/lawyers covered under an association who want to cover their employees). Standard and voluntary plans 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. 12

13 Participation Life and Disability QRS Standard Life, STD and Packaged plans 2 to 9 eligible employees 100 percent 10 to 50 eligible employees employer pays all 100 percent 10 to 50 eligible employees employee contributes 75 percent Life Simplified plans 2 to 9 eligible employees 100 percent 10 to 50 eligible employees 75 percent STD and LTD Simplified plans and Life Simplified Expanded plans 10 to 50 eligible employees Employer pays all 100 percent Employee contributes 50 percent STD and LTD Simplified Expanded plans Voluntary 51 to 100 eligible employees 100 percent employee paid 25 percent or 20 lives Employer pays all 100 percent All plans Coverage can be denied based on inadequate participation. COBRA/state continuation enrollees are not eligible. Retirees are not eligible. Employees may elect life/disability coverage even if they do not elect medical coverage and the group must meet the required participation percentage. If not, life/disability coverage will be declined for the group. Plan Change Employee Level Plan Change Group Level 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). 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 and disability 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 Groups that we have terminated for nonpayment must pay all premiums owed before a new plan will be issued. 51 to 100 eligible employees medical claims will be reviewed along with the health information provided on the employee application and included in the overall medical assessment of the group. 13

14 Rates Replacing Other Group Coverage 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. 1 to 50 employees tabular/age banded rates. Rates are member rated based on each member s date of birth and tobacco status. 51 to 100 enrolled employees Current and renewal rates are required at initial time of proposal. New business rating may be rerated if enrollment changes by more than +/- 10 percent from the initial quote enrollment projection. Composite rates. Four-tier structure: single, couple, employee plus child(ren), family. No portion of the member s cost sharing, including, but not limited to, copayments, deductibles and/or coinsurance balances, will be subsidized or funded by the employer, with the exception of a federally qualified Health Reimbursement Arrangement (HRA), or Health Savings Account (HSA), whether insured or self-funded, including, but not limited to, a partially self-funded Section 105 wrap around, now or in the future; and Employer is not funding the deductible of the quoted health plan through an HRA or HSA arrangement in excess of 50 percent annually or will be subject to an underwriting rating adjustment. Do not cancel any existing coverage until the employer has been notified of approval. Dental - provide a copy of the benefit summary for PPO, FOC and Indemnity plans to receive credit for: Major and orthodontic coverage for standard 2 to 9 and voluntary 3 to 100 eligible employees; and Preventive and basic coverage for voluntary plans. 51 to 100 employees Claims experience is required unless the prior carrier is known not to release claims experience. Medical underwriting is required; known high cost or emergent conditions must be provided. Current and renewal rates are required unless off anniversary. The employer is required to have a history of staying with their carrier for several years. The employer must provide a copy of the current billing statement that includes the account summary and employee roster. Signature Dates Spin-Off Groups (current Aetna customers leaving an Aetna group only) 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, subject to underwriting approval: 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. 51 to 100 employees current Aetna customers leaving an Aetna group will have medical claims reviewed along with the health information provided on the employee application and included in the overall medical assessment of the group. 14

15 Standard Industrial Classification (SIC) Codes Tax Documents 1 to 9 ENROLLED Employees AND 10 to 50 ENROLLED Employees with NO Prior Coverage Underwriting will use a variety of tools, including Dun & Bradstreet, to verify a group s industry code and classify the business correctly. All industries are eligible for medical. Dental and packaged life/disability or disability only have ineligible industries. See dental and life sections below. The dental ineligible list does not apply when dental is sold in combination with medical. 51 to 100 employees provide the SIC code and/or nature of business. 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. 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, corporate officers not listed on the QWTS need to complete the Aetna Small Group Proof of Eligibility form (located at and submit one of the following identified documents. This list is not all inclusive. The employer may provide any other documentation to establish eligibility. Sole proprietor Franchise Limited liability company (operating as a sole proprietor) Partner Partnership Limited liability partnership Corporate officer S-corporation IRS Form 1040 along with Schedule C (Form 1040) IRS Form 1040 along with Schedule SE (Form1040) 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 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 15

16 Tax Documents 1 to 9 ENROLLED Employees AND 10 to 50 ENROLLED Employees with NO Prior Coverage (continued) Corporate officer C-corporation Limited liability company (LLC) operating as C-corp If the officers/owners are on the QWTS, no additional documents are needed 1120 (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 Tax Documents 10 to 50 ENROLLED Employees with Prior Coverage Tax Information/ Documents for Groups with 51 to 100 Employees Tobacco Rates (1 to 50 employees) Two or More Companies Affiliated, Associated or Multiple Companies, Common Ownership (1 to 50 eligible employees) 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. Tax records are not needed. Tobacco rates apply to medical coverage for any person age 18 and older (as of the effective date) who has used tobacco products (cigarettes, pipe, cigars, snuff, or chewing tobacco) an average of four or more times per week within the past six months. This only applies to enrolling person(s) that meets or exceeds the state-defined legal tobacco age. Tobacco rates do not apply to: Individuals who are participating in a cessation program; Religious or ceremonial uses of tobacco (for example, by American Indians and Alaska natives). 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 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 will be considered a single group. 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 businesses 16

17 Two or More Companies Affiliated, Associated or Multiple Companies, Common Ownership (51 to 100 eligible employees) Vision If the companies file taxes together provide a copy of the 851 tax form. If the companies do not file taxes together provide a letter on company letterhead providing a list of each company and percent of ownership for each individual. One owner must have at least 51 percent ownership in each company. Complete the Single Employer Plans form. The letter has to be signed by an officer of the company. The two or more groups may have different Standard Industrial Classification (SIC) codes; however, rates will be based on the SIC code for the group with the majority of employees. Available to groups with two or more eligible employees. 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, 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. No minimum participation or contribution is required. Waivers are not needed as participation is not required. 17

18 Waiting Period At initial submission of the group, the benefit waiting period (BWP) may be waived 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 employee s date of hire. Date of hire BWP is not available. One or two BWP may be selected and must be consistently applied within a class of employees. If two classes are elected, each class must represent a distinct group of employees (hourly vs. salaried, management vs. non-management, etc.) A change to the BWP may only be made on the case anniversary date. No retroactive changes will be allowed. BWP must be consistently applied to all employees, including newly hired key employees. For 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. 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. 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 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: 4/1 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 Date of hire: 4/18 Effective date: 7/16 not 8/15 exactly 90 days from the date of hire 18

19 Dental Coverage Waiting Period Standard 2 to 9 eligible employees and voluntary 3 to 100 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. 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, 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 preceding 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 ortho services Standard 10 to 100 eligible employees No waiting period. Creditable Prior Coverage Ineligible Industries 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. All industries are eligible if sold with medical. The following industries are not eligible when dental is sold standalone or packaged only with Life Advertising, Miscellaneous Miscellaneous Repair Amusement, Recreation & Entertainment Miscellaneous Services Associations & Trusts Mobile Home Dealers Auto dealerships Passenger Transportation Beauty & Barber Shops Photo Studios Direct Mailing, Secretarial Photofinishing Labs Employment Agencies Real Estate Engineering & Mgmt Services Repairs, Cleaning, Personal Svc 19

20 Ineligible Industries (continued) Hotels Restaurants International Affairs Schools, Libraries, Education Jewelry Manufacturing Seasonal employees Legal Security Sys, Armored Cars Medical Groups Service-Private Households Medical Groups Social Services Museums, Art Galleries Botanical Gardens Miscellaneous Business Services Watch, Clock & Jewelry repair Miscellaneous Computer Services 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 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 2 to 100 eligible employees no open enrollment. Product Packaging 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. 20

21 Life and disability Continuity of Coverage (no loss/no gain) Evidence of Insurability (EOI) 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 have to submit to 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 guaranteed standard issue limit. Late entrant 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. Employees request life or disability at the individual level and are late enrolling, 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 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. 21