Small Group underwriting guidelines

Transcription

1 Small Group underwriting guidelines for brokers and producers Effective June CABENABC Rev. 6/14

2 Important contact information Small Group Underwriting address Anthem Blue Cross P.O. Box 9042 Oxnard, CA Small Group Underwriting New business: Existing business: New business telephone: New business fax: Existing business fax: For overnight delivery only Anthem Blue Cross Small Group Underwriting Department 4553 La Tienda Drive Thousand Oaks, CA Small Group Customer Service Telephone: Hours: 8:00 a.m. to 6 p.m. PST (Monday Friday) Broker Services Telephone: [email protected] Hours: 8:30 a.m. to 5 p.m. PST (Monday Thursday) 8:30 a.m. to 3 p.m. PST on Friday Rapid Quote Telephone: [email protected] Workers Compensation new business Employers Compensation Insurance Company P.O. Box 9057 Oxnard, CA Telephone: Anthem Blue Cross website anthem.com/ca For Producers section of website My User ID: My Password: To order supplies Fax: (fax completed Agent Supply Request form only) Online: Go to anthem.com/ca > Producers tab > log in > Agent Supplies and Order Supplies Online. View these guidelines and other documents online To view these guidelines and other documents online, visit anthem.com/ca and click Producers. Then, log in and select Small Group. From there, you can view, download and print our forms and documents. Anthem Dental Prime and Complete Connect Team Telephone: Hours: 5 a.m. to 5 p.m. PST (Monday-Friday) [email protected] Mail: Anthem Connect 730 S Broadway Gilbert, MN SBC Links: Link for 2013 and prior years pre-aca-compliant plans: find-sbc.com Link for 2014 ACA-compliant plans: sbc.anthem.com Producer Tool Box: brokerportal.anthem.com/ehb/web/bkr/acc/ login.htm?wlp-brand=bcc Easy renew: anthem.com/easyrenew Producer news: news.anthem.com/ca Quoting tool: healthconnectsystems.com/caquote/login. cfm?site=anthem Standard Industry Classification (SIC) Codes: listsareus.com/business-sic-codes.htm#codes osha.gov/pls/imis/sicsearch.html Making Health Care Reform Work: makinghealthcarereformwork.com

3 Table of contents Introduction...1 Section 1 Overview of the underwriting process Requirements for completing forms Guidelines for completing forms Processing time specifications Evaluation criteria...3 Section 2 General underwriting guidelines for new business Group eligibility requirements Employee eligibility requirements Contribution Medical participation requirements Medical plan names Product type Network options Dental coverage Vision coverage Life coverage Premium Only Plan (P.O.P.) Workers Compensation Rating policies Rate and benefit guarantee New group effective date Waiting period Takeover provisions Prior deductible credit/annual maximum copay/ dental benefit waiting period credit Eligible dependents Federal regulations State regulations Section 3 California underwriting business requirements Sole Proprietors Corporations Partnerships Limited Partnership (LP) Limited Liability Partnership (LLP) Limited Liability Company (LLC) Conditions of Enrollment for Start-Up Companies Professional Employer Organization (PEO) Spin-Off Groups Union versus Nonunion Churches Households Section 4 General underwriting guidelines for existing business.16 1 Qualifying Event enrollment period Contract benefit modifications Benefit Modification Job Aid...17 Section 5 Definitions...18 Section 6 Forms...20

4 Introduction Navigating the new world of health care coverage is full of opportunities and important changes. We must help consumers understand all their options, so they can choose coverage that best fits their needs. Now, more than ever, your clients will depend on you for your experience and knowledge to help them through the process. This Small Group Underwriting Guidelines booklet has the information and links to tools you need to write new business with our company and continue servicing your existing clients. We re committed to helping you grow your book of business and increase the retention of your clients. While we strive to keep all parties informed of any changes to these guidelines in a timely manner, we may change these guidelines at any time without prior notice. We will communicate changes as updates. Anthem Blue Cross will make the final decision to accept or decline a case, or change an effective date of coverage. Agents are not authorized to bind or guarantee coverage, or give a specific effective date. Please advise all prospective groups to maintain their current coverage until we notify them that we ve established their coverage. The information contained in this guideline is intended for use by authorized agents only and may not be copied or distributed for any other purpose. 1

5 Overview of the underwriting process 1 Requirements for completing forms The following documentation is required when submitting new business: a. A copy of agent s quote (based on final enrollment) b. The most current Small Group Employer Application c. The most current applications from all employees enrolling d. Waivers from all employees not electing coverage (Proof of coverage may be required) e. A copy of the company s most recent Quarterly State Tax Withholding Report with the current employment status of all employees listed 1 (Payroll may be required) f. If takeover coverage, a copy of the prior carrier s last month s group premium statement g. COBRA/FMLA/Cal-COBRA questionnaire; the last billing statement listing COBRA/Cal-COBRA subscribers h. A completed Check-by-Fax form for 100% of the first month s premium made payable to Anthem Blue Cross (If electronic debit is not agreed to, a company check may be accepted, subject to additional processing time) i. Statement of Understanding required with all medical plan submissions. (Subject to regulatory review and approval) 2 j. Demand Debit Authorization (Needed when group has enrollment in HRA plans) k. HRA Client Agreement, if enrolling in HRA plans l. Member Social Security Number Exception Request form for enrolling employees and dependents not providing a Social Security number 2 Guidelines for completing forms All questions must be answered, and all signatures and dates must be obtained, before Anthem Blue Cross can begin processing the group s applications. If the group s paperwork is incomplete, Anthem will be unable to complete the process. Here is additional information you should know: a. The employee s signature date cannot be more than 60 days prior to the requested effective date for new group submissions. b. Only the employee may fill in or modify information on the employee application. Any changes must be initialed and dated by employee. No alteration to pre-printed material on the employee application is acceptable. Altered forms will be rejected. c. Whenever an individual has a language barrier and requires assistance to properly complete the application, the application must be submitted with a signed Anthem Blue Cross Exceptions to Standard Enrollment form/translator s Statement from the group or the agent explaining the situation. Section 1 1 See Section 3, California Underwriting Business Requirements for Sole Proprietors, Partners or Corporate Officers not appearing on the Quarterly State Tax Withholding Report. 2 Anthem Blue Cross small group plans cannot be sold or utilized in conjunction with any product, whether insured or self-funded, that funds any annual deductible, copayment, coinsurance, or out-of-pocket expense of the health benefit plan (i.e., wrapping ). 2

6 Overview of the underwriting process 3 Processing time specifications When you first submit a case, make sure all required forms and other documents are completed accurately and included with your submission. a. Anthem Blue Cross will accept new group submissions by the fifth working day of the month when the application is for the first of the month effective date. If the application is made for a 15th of the month effective date, paperwork must be received by the 12th calendar day of the month. b. Any additional information required for making a determination must be received within 10 days of when Anthem requests the information. c. When the information submitted is incomplete and subsequently not received in a timely manner, the group s application may be withdrawn for the month requested. 4 Evaluation criteria Underwriting is based on the following criteria: a. Employee and dependent eligibility b. Employee participation c. Employer eligibility d. Employer contribution e. Health status (Health questions will be required for Life Underwriting only.) Section 1 3

7 General underwriting guidelines for new business 1 Group eligibility requirements Any group qualifying as a small employer and meeting the following eligibility requirements is eligible for Anthem s Small Group (SG) health plans on a guaranteed issue and guaranteed renewability basis. To qualify for Anthem Blue Cross coverage, a group must meet the criteria outlined below: a. Must be a person, firm, proprietary or nonprofit corporation, partnership, public agency or Guaranteed Association. b. On 50% of previous calendar quarter, or calendar year, group employed at least one, but not more than 50, eligible employees, the majority (51% or more), of whom were employed within the state of California. c. Must have and maintain business licensure and/or appropriate state filings allowing the company to conduct business in California. d. Must not have been formed primarily for the purpose of buying health plan/insurance coverage. e. Must involve a bona fide employer-employee relationship. f. A sole proprietorship is ineligible for enrollment without a common law employee. An owner/spouse does not constitute a common law employee. A qualified joint venture owner (i.e., husband and wife are co-owners of the business and file taxes as a qualified joint venture) are ineligible for enrollment without a common law employee. An owner/spouse does not constitute a common law employee. Partners in a partnership are eligible for coverage on their own if they meet the definition of eligible employee. A spouse does not constitute a common law employee (refer to employee eligibility requirements). Affiliated Companies In determining group size, companies that are affiliated companies and eligible to file a combined tax return for purposes of state taxation will be considered one employer. Note: The following are examples of group s that are not considered small employers. Groups wholly owned by an individual and/or a spouse-employee. Employer groups with less than 51% of employees working in California. Carve-out groups. Note: Groups wanting to re apply for Anthem Blue Cross coverage must be in good standing and pay any premium balance due. 2 Employee eligibility requirements a. Permanent employees who are actively engaged on a full-time basis in the conduct of the business of the small employer, with a normal work week of an average of 30 hours per week over the course of a month, at the small employer s regular places of business, who have met any statutorily authorized applicable waiting-period requirements. b. Sole proprietors, corporate officers, or partners of a partnership, if they are engaged on a full-time basis (average of 30 hours per week over the course of a month) in the small employer s business and included as employees under a health care service plan contract of a small employer. c. Permanent employees who work at least 20 hours, but not more than 29 hours, are deemed to be eligible employees if all four of the following apply: They otherwise meet the definition of an eligible employee except for the number of hours worked. The employer offers the employees health coverage under a health benefit plan. All similarly situated individuals are offered coverage under the health benefit plan. The employee must have worked at least 20 hours per normal work week for at least 50% of the weeks in the previous calendar quarter. Anthem may request any necessary information to document the hours and time period in question, including, but not limited to, payroll records and employee wage and tax filings. d. Seasonal, temporary or substitute employees, defined as employees hired with a planned future termination date, are not eligible. Employees compensated on a 1099 basis are not eligible. Note: Owners may demonstrate that they meet the eligible employee criteria by providing W-2s or completing Eligibility Statement. Section 2 4

8 General underwriting guidelines for new business 3 Contribution Employers may choose their preferred approach for contributing to employee health premiums. Payroll deduction is required if contributory. Employers have the following contribution options: Medical Traditional Option A minimum contribution of 50% of each employee s monthly health premium for EmployeeElect or Fixed-Dollar Option Any fixed-dollar amount $100 or greater (in $5 increments) for each covered employee s health premium for EmployeeElect or Percentage and Plan Option A minimum of 50% toward a specific plan, chosen by the employer Note: During the annual open enrollment period November 15 to December 15, contribution requirements will not be enforced. Dental Traditional Option A minimum of 50% of each covered employee s monthly dental premium is required. or Fixed-Dollar Option Any fixed-dollar amount $15 or greater (in $5 increments) of each covered employee s monthly dental premium is required. Voluntary Dental A minimum of 0% and a maximum of 49% of each covered employee s monthly voluntary dental premium. Voluntary Dental plans may be 100% employee-paid and cannot be combined with nonvoluntary Small Group Dental plans. Dental (Anthem Dental Prime and Complete) No minimum contribution is required. Vision A minimum of 50% of each covered employee s monthly vision premium is required. Voluntary Vision A minimum of 0% and a maximum of 49% of each covered employee s premium; Voluntary Vision may be 100% employee paid. Section 2 Life Employers must contribute a minimum of 25% of each covered employee s monthly Life premium. Payroll deduction is required if contributory. 5

9 General underwriting guidelines for new business 4 Medical participation requirements The group participation requirements are: 75% for groups with fewer than 10 enrolled subscribers. 70% for groups with between enrolled subscribers. 60% for groups with 20 and over enrolled subscribers. The minimum participation is 100% if non-contributory. Note: During the annual open enrollment period November 15 to December 15, participation requirements will not be enforced. The effective date will be January 1 of the following year. Anthem Blue Cross may conduct periodic audits to confirm participation levels. The group must maintain the corresponding minimum participation levels in order to remain eligible. Groups are subject to cancellation or nonrenewal if participation falls below the required minimum. For purposes of calculating participation, the following may be considered as valid waivers, subject to receipt of a declination and proof of other coverage, such as: Employer-sponsored group coverage through another employer Medi-Cal Medicare United States military coverage Note: An owner of multiple entities will not be considered a valid waiver if the owner is declining due to coverage under another entity in which he/she holds ownership. 5 Medical plan names a. Premier plans (platinum level) These provide the highest level of benefits, and employees often pay less when they get care. However, these plans have the highest monthly premiums. b. Preferred plans (gold level) These provide richer benefits than the Essential and Core plans, and employees pay less when they get care. However, the monthly premium is higher than with those plans. c. Essential plans (silver level) These offer affordable monthly premiums, but, compared to the Core plans, employees pay less when they get care. d. Core plans (bronze level) These feature broad benefits and the lowest monthly premiums, but employees pay more when they get care; deductibles, copays and cost shares may be higher than with the other plans. e. Metal-equivalent naming structure Actuarial values can be used to compare different plan designs and determine how overall cost sharing differs across plans with different cost-sharing provisions. Minimum and Maximum AV Premier/Platinum 88%/92% Preferred/Gold 78%/82% Essential/Silver 68%/72% Core/Bronze 58%/62% Section 2 6

10 General underwriting guidelines for new business 6 Product type Direct Access (PPO) Allows members to go directly to any in-network provider. There is no need to choose a primary care physician (PCP) or get a referral to see other doctors. GuidedAccess (HMO) Requires members to choose a PCP. A referral is required to see other doctors. Health Savings Account (HSA) A savings account for certain plans that members can fund with pre-tax dollars and use to pay for qualified health care expenses, including prescriptions. This is often used with a consumer-driven health plan. Health Reimbursement Account (HRA) These plans are funded by an annual allocation by the group and used for first-dollar coverage. 7 Network options PPO: Statewide PPO network (Prudent Buyer) Provides access to nearly 60,000 California doctors and specialists, and more than 330 hospitals. SELECT PPO network Provides access to more than 40,000 California doctors and specialists, and more than 300 hospitals. Note: At enrollment, the group will be required to choose only one PPO network option. HMO: Traditional HMO network (CaliforniaCare) Provides access to more than 40,000 California doctors and specialists, and more than 330 hospitals. SELECT HMO network Provides access to more than 23,000 California doctors and specialists, and nearly 250 hospitals. Priority SELECT HMO network Provides access to more than 7,500 California doctors and specialists, and more than 150 hospitals. Note: At enrollment, the group will be required to choose only one HMO network option. Employers must select a network for each plan type. For example, the employer may offer employees plans available in the Select HMO network alongside the Statewide PPO network. Please note: Not all network options are available in every area. Section 2 7

11 General underwriting guidelines for new business 8 Dental coverage Employers have the option of selecting all plans for their employees, or designating specific plan options to make available to employees. Dental Prime and Dental Complete can only be purchased with the Dental Net series of plans. Standard group participation for EmployeeElect is a minimum of 75% of eligible employees. For Anthem Dental Prime and Complete, it is a minimum of 60% of eligible employees. Minimum contribution requirements are defined in section 2, number 3. Voluntary Dental plans are offered to groups of 5-50 with a minimum of three enrolling at all times, or 25% participation of eligible employees enrolling, whichever is greater. Voluntary Dental is only available in California. Coverage is available as a stand-alone, or in conjunction with Medical, Dental and Life. Pediatric dental All individuals enrolled in Small Group coverage outside a public exchange/marketplace are required to have qualified pediatric dental coverage. Members enrolling in an Anthem health benefit plan, will be auto-enrolled into a qualified pediatric dental plan. If members select a health benefits plan that does not include required pediatric dental coverage, we will automatically enroll members in qualified pediatric dental coverage. The additional cost of this pediatric dental coverage will be added to the employer s billing statement. Note: These benefits provide important coverage for kids up to age 19, including preventive care, fillings and more extensive services like medically necessary orthodontia. 9 Vision coverage Anthem Blue Cross Life and Health Insurance Company now offers Blue View Vision SM in two plan options designed for Small Business. a. Coverage is available as a stand-alone, or in conjunction with Medical, Dental and Life. b. There are two plans available. Employers may elect one or both options. c. Participation is 75% on EmployeeElect (100% if noncontributory). d. The contribution is 50% on EmployeeElect. All of our Small Group health plans include pediatric vision essential health benefits (EHBs), which provide coverage for vision exams and glasses or contacts for kids up to age 19. Members can see any provider in the Blue View Vision SM network, which includes retailers such as LensCrafters and Target Optical, as well as CONTACTS. Voluntary Vision a. Is available as a stand-alone product or in conjunction with medical, dental and/or life. b. The participation minimum is 10 enrolling. c. The employers contribution is 0%-49%. Section 2 8

12 General underwriting guidelines for new business 10 Life coverage a. Enrollees must be actively at work in order to be eligible for coverage. b. Participation requirements are 75% of eligible employees on the EmployeeElect portfolio. If noncontributory, 100% participation is required. (Cobra or Cal-Cobra applicants are not eligible for life insurance.) c. Employers must contribute a minimum of 25% of the Life premium. d. Life is available to groups of 2 or more. A minimum of two must enroll. e. Coverage is available as a stand-alone, or in conjunction with Medical and Dental. f. Benefit amounts are available from $25,000 to $300,000 depending on the size of the group. g. Dependent Life is available in conjunction with Employee Life only on a guarantee issue basis for: $20,000 spouse/$10,000 each child $15,000 spouse/$7,500 each child $10,000 spouse/$5,000 each child $5,000 spouse/$2,500 each child $2,000 spouse/$1,000 each child These options vary by group size. h. Employer groups with 2-9 eligible enrolling employees are guaranteed for up to $30,000 of life insurance coverage; eligible enrolling employees are guaranteed for up to $50,000 of life insurance coverage; and eligible enrolling employees are guaranteed up to $100,000 of life insurance coverage. Any life insurance coverage over the guaranteed amounts will require a health questionnaire to be completed, and is subject to Underwriting approval. i. For all new groups of 10 or more enrolling employees, Composite Rates will be offered. Composite Rates mean that a qualifying group receives a single rate per $1,000 of Life coverage, (Rates determined by group size, area and SIC code.) j. Future enrollees and new hires must complete the appropriate health questionnaire section, if the amount chosen is more than the Guarantee Issue amount. Life insurance is subject to Underwriting approval. k. Supplemental Life is available for groups of in addition to the basic Life option on the EmployeeElect portfolio. A minimum participation of 25% of eligible employees is required, Supplemental Life is 100% employee-paid. Supplemental Life is not available on a stand-alone basis and can only be added when Basic term Life is effective with Anthem and is subject to Underwriting approval. Supplemental Life is available in specific dollar amounts of $15,000, 25,000, $50,000 and $100,000. The benefit amount is determined at the group level and not the member level. Supplemental Life rates are based on age bands (each employee s premium is based on the group s rate table using five-year age bands). 11 Premium Only Plan (P.O.P.) P.O.P. is available to any size group and is allowed under a special provision of Section 125 of the IRS Tax Code, which addresses employer and employee tax relief. With a P.O.P., employers must adjust their payroll process and pay the employees portion of their group insurance premiums on a pre-tax basis. Employees must pay a portion of their premium in order to qualify for P.O.P. If the Employer pays the full premium (100%), a P.O.P. cannot be established. WageWorks will provide all necessary information for a group to install and support a P.O.P. There is a $125 annual fee for the service. Groups that enroll 10 or more eligible employees on Medical and Life will receive the first year s P.O.P. services from WageWorks at no charge. A separate check for the P.O.P. premium made payable to Anthem Blue Cross must be submitted along with the P.O.P. application. If a group applies for Anthem Blue Cross medical coverage concurrently with P.O.P., the group must submit the P.O.P. application and separate check with all other required paperwork. For complete details, order the Employer s Guide to P.O.P. available online at anthem.com/ca. Note: The P.O.P. application cannot be processed until group medical and/or dental, vision and life coverage has been approved. Therefore, the P.O.P. effective date assigned by WageWorks may be later than the effective date of the group s medical, dental, vision and life coverage. WageWorks, an independent company that is not affiliated with Anthem Blue Cross, its affiliates or its parent corporation, provides the required material that allows a group to implement the P.O.P. Section 2 9

13 General underwriting guidelines for new business 12 Workers Compensation Workers Compensation insurance is available in conjunction with Medical and is underwritten by Employers Compensation Insurance Company. Integrated MediComp combines group health and Workers Compensation to provide 24-hour coverage for the employee all administered through one source. 13 Rating policies a. All rates will be based on actual enrollment. b. Rates will be based on the geographic rating region of the employee. c. Approved out-of-state employees will be charged an area-rate based on the location of the employer s place of business. d. Forty-five age bands with a three to one maximum ratio. e. Medicare primary and secondary rates are the same. 14 Rate and benefit guarantee a. Medical rates are guaranteed for a minimum of 12 months. The anniversary month will determine the timing of future adjustments. b. Stand-alone dental has a 12-month rate guarantee. c. If dental is written in conjunction with medical, it will receive the medical rate guarantee. d. Life rates are guaranteed for 12 months. e. Vision rates and benefits are guaranteed for 12 months. f. Pediatric dental has a 12-month rate guarantee. Date of birth rating changes will occur at the policy anniversary date. The date change will be based on the age of enrollee(s) as of the date of the annual policy contract date. 15 New group effective date a. The eligibility date for existing employees and dependents is the employer s effective date, unless new hires have not yet satisfied their employer s imposed waiting period. The effective date for these employees will be the first of the month following completion of the waiting period and submission of the Small Group Employee Application. b. Groups will not be guaranteed an effective date unless complete and correct group enrollment materials are received timely and approved by Anthem. c. It is the agent s responsibility to notify the Underwriting department prior to approval if a change in the requested effective date is to be considered. A request for change will be required in writing from the employer. 16 Waiting period The employer selects the waiting period, which is the period of time that must pass between an employee s hire date and the date the employee is eligible to enroll or decline to participate in the employer s benefit plan. Anthem will offer the following waiting-period options: First of the month following the date of hire. First of the month following one month from the date of hire, not to exceed 60 days. If it exceeds 60 days, Anthem will make the subscriber effective the first of the month following the date of hire. Note: Existing Small Groups with waiting periods in excess of 60 days will be mapped to the first of the month following one month from the date of hire. The employer has the option to waive the waiting period for all new hires at the initial group enrollment only. 17 Takeover provisions Small Group takeover provisions comply with the following: Any carrier providing replacement coverage with respect to hospital, medical or surgical expense, or service benefits within a period of 60 days from the date of discontinuance of a prior contract or policy providing such hospital, medical or surgical expense or service benefits will immediately cover all employees and dependents who were validly covered under the previous contract or policy providing such hospital, medical or surgical expense, or service benefits at the date of discontinuance and are within the definitions of eligibility under the succeeding carrier s contract and who would otherwise be eligible for coverage under the succeeding carrier s contract, regardless of any provisions of the contract relating to active full-time employment or hospital confinement or pregnancy. However, with respect to employees or dependents who are totally disabled on Section 2 10

14 General underwriting guidelines for new business the date of discontinuance of the prior carrier s contract or policy and entitled to an extension of benefits pursuant to subdivision (b) of Section , or pursuant to subdivision (d) of Section of the Insurance Code, the succeeding carrier is not required to provide benefits for services or expenses directly related to any conditions that caused the total disability. 18 Prior deductible credit/annual maximum copay/dental benefit waiting period credit a. For new group submissions, Anthem Blue Cross provides credit for deductibles met under prior takeover group medical or prior takeover group dental coverage if proof of the actual dollar amount is submitted with the first claim. This provision does not apply to new hires. b. Credit for a pharmacy deductible is not available, except when the member s prior takeover group coverage was an Aggregate plan (e.g., HSA). c. Credit for the annual maximum copay is not available, except when the takeover group is moving from Anthem Large Group coverage. d. Anthem Blue Cross provides credit for the dental benefit waiting periods if Anthem Blue Cross receives proof of 12 months of prior creditable dental coverage at enrollment and there is no lapse in coverage between carriers. 19 Eligible dependents An eligible employee may be required to provide proof of dependency. Dependent coverage is available to the following: a. Lawful spouse b. Registered domestic partner (Family code Section 297) c. Disabled dependent child, who at the time of becoming age 26, is incapable of self-sustaining employment by reason of a physically or mentally disabling injury, illness or condition, and is chiefly dependent on the subscriber for support and maintenance (A disabled dependent may be eligible for benefits beyond his or her 26th birthday.) d. An employee s, spouse s or registered domestic partner s child under age 26: Natural child Newborn child Stepchild Legally adopted child Ward of legal guardian Child for whom the Eligible Employee has assumed a parent-child relationship (does not include foster children), as indicated by intentional assumption of parental status or assumption of parental duties by the Eligible Employee. The employee for the annuitant must certify at the time of enrollment of the child and annually thereafter. Note: In the case of birth, adoption, or placement for adoption, the child will be covered for the first 31 days from the date of birth, adoption, or placement for adoption. Coverage will continue beyond the 31 days, provided that you submit an application/change form to the Group within 60 days from the date of the birth, adoption, or placement for adoption to add the child to your Plan. If you submit an application/change form to the Group within 60 days from the date of birth, adoption, or placement for adoption, coverage for the child under your Plan will be effective beginning on the date of birth, adoption, or placement for adoption. A child will be considered adopted from the earlier of: (1) the moment of placement in your home; or (2) the date of an entry of an order granting custody of the child to you. The child will continue to be considered adopted unless the child is removed from your home prior to issuance of a legal decree of adoption. Section 2 11

15 General underwriting guidelines for new business 20 Federal regulations a. Federal TEFRA, DEFRA and COBRA legislation has been enacted to regulate employee health care coverage. Based on this legislation and the limitations of the Anthem Blue Cross agreement, if a business employs, on average, fewer than 20 employees in a year and any employee becomes age 65, the employee s primary carrier must be Medicare. For these employees who are 65 years old and choose to retain their Anthem Blue Cross Small Group coverage, Anthem Blue Cross will apply contract benefits as a secondary carrier for Medicare benefits paid or payable. b. If a member is covered by both Medicare and an Anthem Blue Cross contract, and Anthem Blue Cross is secondary to Medicare, the Medicare payment is calculated first and Anthem Blue Cross coordinates up to 100% of coverage for deductibles and coinsurance not to exceed the Anthem Blue Cross benefit. If a member is required to pay an additional premium for any part of Medicare and chooses not to enroll in that part, Anthem Blue Cross will pay per contract benefits as primary. If a member is eligible for any part of Medicare that is premium-free and chooses not to enroll in that part, Medicare would be considered primary and the member s Anthem Blue Cross plan would be secondary. Anthem Blue Cross will estimate Medicare s benefit prior to Anthem Blue Cross coordinating coverage for deductibles and coinsurance. c. Anthem Blue Cross is secondary to Medicare when the following criteria are met: The employer has fewer than 20 employees and the member is age 65. Members under 65 are eligible for Medicare due to a disability. Members are enrolled following the first 30 months of kidney dialysis treatments for end-stage renal disease. d. COBRA: Participation in the employee s benefit plan, as well as coverage under whatever medical programs are provided by the employer to employees and their dependents, may be continued under a federal law known as COBRA for groups that employ 20 or more employees for at least 50% of the previous calendar year. The employer is responsible for administration (within the guidelines established by the federal government for compliance by employer groups) State regulations Cal-COBRA (SB719) took effect January 1, This legislation provides for the continuation of coverage for employees and eligible dependents of qualifying groups with 2 19 employees. Under California law AB1401, Cal-COBRA provides continuation of coverage for groups of 2 19 eligible employees for at least 50% of the working days in the previous calendar year. Groups of one employee are not eligible for Cal-COBRA. An employee and/or his or her eligible dependents are eligible for continuation of coverage under Cal-COBRA for up to 36 months (if they were enrolled in Cal-COBRA on or after January 1, 2003), if coverage was terminated due to any of the following qualifying events: a. Death of the plan subscriber (continuation for dependents) b. Employee s termination of employment or reduction in hours c. Spouse s divorce or legal separation from the subscriber d. Loss of eligible dependent status of an enrolled child e. Subscriber becoming entitled to Medicare f. Loss of eligible status of enrolled family member Anthem Blue Cross is currently administering Cal-COBRA. However, brokers and agents are responsible for submitting Cal-COBRA questionnaires, applications and remittance checks with new business. Note: Cal-COBRA rates are 110% of the group rate. Effective January 1, 2008, AB910 amended existing law to extend the continuation of coverage rights for over-age dependents who are: 1) incapable of self-sustaining employment by reason of physically or mentally disabling injury, illness or condition; and 2) chiefly dependent on the subscriber for support and maintenance. The law sets out new notification timelines, and requires subsequent health care service plans and health insurers to honor continued coverage unless there is a demonstration that the child no longer meets eligibility requirements. Section 2

16 California underwriting business requirements 1 Sole Proprietors A sole proprietor employer must employ at least one common law employee as anyone who performs services for an employer that controls what will be done and how it will be done as defined by IRS Guidelines. A Sole Proprietor will need to provide all of the following: a. A California Business License or Fictitious Business Name Filing b. Anthem Blue Cross Eligibility Statement c. Quarterly State Tax Withholding Report, if available, or payroll records for six weeks d. If the owner is not listed showing wages on the Quarterly State Tax Withholding Report, the group will also need to provide: Current Schedule C or a Schedule F for Farms (If this is not available due to the length of time in business or because there is an extension to file, a California Business License or Fictitious Business Name filing may be substituted.) 2. Corporations A corporation will need to provide all of the following: a. Statement of Information or corporate meeting minutes (listing names of all officers) may be considered b. Anthem Blue Cross Eligibility Statement c. Quarterly State Tax Withholding Report, if available, or payroll records for six weeks Corporations established out of the state will also need to provide a Certificate of Qualification in addition to the above documentation. If the percentage of ownership is zero, the enrolling Corporate Officer must appear on the Quarterly State Tax Withholding Report. 3 Partnerships A partnership will need to provide all of the following: a. Partnership Agreement and Federal Tax ID appointment letter may be required b. Anthem Blue Cross Eligibility Statement c. Quarterly State Tax Withholding Report, if available, or payroll records for six weeks d. If partners are not listed showing wages on the Quarterly State Tax Withholding Report, the group will also need to provide: Current Schedule K 1 (If this is not available due to the length of time in business or because there is an extension to file, a Partnership Agreement and Federal Tax ID appointment letter may be substituted.) 4 Limited Partnership (LP) A Limited Partnership will need to provide all of the following: a. Partnership Agreement and Federal Tax ID appointment letter may be required b. Anthem Blue Cross Eligibility Statement c. Quarterly State Tax Withholding Report, if available, or payroll records for six weeks d. If Limited or General Partners are not listed showing wages on the Quarterly State Tax Withholding Report, the group will also need to provide the following: Current Schedule K 1 (If this is not available due to the length of time in business or because there is an extension to file, a Partnership Agreement and Federal Tax ID appointment letter may be substituted.) Limited Partnerships established out of state will also require a Foreign Limited Partnership Application for Registration (Form #LP-5) filed and stamped by the California Secretary of State. Section 3 13

17 California underwriting business requirements 5 Limited Liability Partnership (LLP) 6 Limited Liability Company (LLC) A Limited Liability Partnership (LLP) will need to provide all of the following: a. Partnership Agreement and Federal Tax ID appointment letter may be required b. Anthem Blue Cross Eligibility Statement c. Quarterly State Tax Withholding Report, if available, or payroll records for six weeks. d. If partners are not listed showing wages on the Quarterly State Tax Withholding Report, the group will also need to provide the following: Current Schedule K 1 (If this is not available due to the length of time in business or because there is an extension to file, a Partnership Agreement and Federal Tax ID appointment letter may be substituted.) Limited Liability Partnerships established out of state will also require a Registered Limited Liability Partnership Certificate of Registration filed and stamped by the California Secretary of State. A Limited Liability Company (LLC) will need to provide all of the following: a. Articles of Organization with Operating Agreement or Statement of Information b. Anthem Blue Cross Eligibility Statement c. Quarterly State Tax Withholding Report, if available, or payroll records for six weeks d. If managing members are not listed showing wages on the Quarterly State Tax Withholding Report, the group will also need to provide all of the following: Current Schedule K 1 (If this is not available due to the length of time in business or because there is an extension to file, a Statement of Information or Articles of Organization with Operating Agreement may be substituted.) Limited Liability Companies established out of state will also need to provide a Limited Liability Company Application of Registration filed and stamped by the California Secretary of State. A Single Member LLC or Disregarded Entity will be considered to have one owner. Section 3 7 Conditions of Enrollment for start-up Companies A start-up group can be considered for Small Group coverage. The company will need to sign Conditions of Enrollment for Start-up Companies form and provide the first 30 days of payroll records for all employees within 45 days of the effective date. 14

18 California underwriting business requirements 8 Professional Employer Organization (PEO) Spin-Off Groups Employees associated with a PEO are employed by the business listing the employees on its DE9C. A business leasing employees from a PEO cannot cover these employees under Anthem Blue Cross group coverage. The group must be actively engaged in a business or service The group was not formed primarily for purposes of buying health care plan A bona fide employer-employee relationship exists. Group must provide a copy of PEO client invoice billed to the worksite business, which includes names of each employee previously leased to the worksite employer. PEO will need to sign Conditions of Enrollment form. 9 Union versus Nonunion The group must be actively engaged in a business or service. On at least 50% of its working days during the previous calendar quarter or calendar year, the group employed at least one, but not more than 50, eligible employees, the majority of whom were employed within this state. The group was not formed primarily for purposes of buying a health care plan. A bona fide employer-employee relationship exists. A copy of the Union Roster will be required from the employer identifying Union members. Note: Groups that exceed 50 employees (combined number of union and non-union employees) may be considered for large group. 10 Churches The group must be actively engaged in a business or service. On at least 50% of its working days during the previous calendar quarter or calendar year, the group employed at least one, but not more than 50, eligible employees, the majority of whom were employed within this state. The group was not formed primarily for purposes of buying health care plan. A bona fide employer-employee relationship exists. Members of the clergy who do not appear on the Quarterly State Tax Withholding Report should submit a Schedule SE or Form 4361 with IRS approval. 11 Households The group must be actively engaged in a business or service. On at least 50% of its working days during the previous calendar quarter or calendar year, the group employed at least one, but not more than 50, eligible employees, the majority of whom were employed within this state. The group was not formed primarily for purposes of buying health care plan. A bona fide employer-employee relationship exists. File a Quarterly State Tax Withholding Report. Note Private household employers who pay annual, rather than quarterly, withholdings will not be eligible. Section 3 15

19 General underwriting guidelines for existing business 1 Qualifying Event enrollment period An employee and/or qualified dependent(s) who previously declined coverage may enroll at the group s anniversary date or upon a Qualifying Event. A Qualifying Event enrollment period is defined under section 5, page 19, Definitions. 2 Contract benefit modifications Group level: The required documentation must be complete and accurate to process the request. The completed documentation, including all necessary Anthem Blue Cross forms, must be received by Anthem Blue Cross within 30 days of the requested anniversary date. Nonanniversary benefit modifications will not be accepted. Please refer to the Benefit Modification Job Aid (page 17) to determine when each type of benefit modification may be requested and which documents must accompany your request. The following criteria also apply to group-level contract benefit modifications: a. Only one medical benefit modification will be allowed in a 12-month period. b. Increases in Life benefits may be subject to Underwriting approval. c. Changes in products, portfolios or programs do not constitute a new rate and benefit guarantee period. d. Completed paperwork from groups requesting a benefit modification should be received by the underwriter within 30 days of the requested effective date. e. Existing groups can only change their employer contribution approach once in a 12-month period, subject to Anthem approval. f. The anniversary date cannot be changed unless mutually agreed upon. (Any exceptions will equally apply to all groups.) g. Anthem Blue Cross must be notified of changes in company name, ownership or tax ID number. These changes are subject to Anthem review. Note: Your group benefit agreement is not assignable or transferable, and it may not, among other things, be transferred as part of a sale of the assets of the business. Subscriber level: a. Covered subscribers may move to a different product offered by their group at the anniversary month of the group s original effective date. b. A subscriber can request a change in medical benefits by submitting a letter from the group on company letterhead explaining the request to change or by completing the Plan Change Request form on the anniversary date. Section 4 16

20 General underwriting guidelines for existing business Benefit Modification Job Aid Benefit modification When eligible Documents necessary Adding or downgrading a medical plan At a group s anniversary only. Off-anniversary changes are not allowed. 1. Letter from the group or renewal documents, if available. 2. Add-On/Change of Coverage Applications for employees, may be required. 3. Statement of Understanding* subject to regulatory approval. Adding Standalone Dental, Vision or Life coverage New group number will be issued for standalone coverage. Add Dental, Vision or Voluntary Dental and Vision plans Cancelled Blue View vision coverage can only be re-added at Anniversary date. Excluding Dental Prime and Complete Plans Dental Prime and Dental Complete plans Adding Life Insurance or Increasing Existing Coverage The following amounts are Guaranteed Issue: $20,000 spouse/$10,000 each child $15,000 spouse/$7,500 each child $10,000 spouse/$5,000 each child $5,000 spouse/$2,500 each child $2,000 spouse/$1,000 each child Coverage amounts over Guaranteed issue (GI) are subject to Underwriting approval. Add Part-Time Employee Eligibility (Refer to section 2 number 2) Off anniversary First of the month following receipt of all documentation First of the month following receipt of all documentation. First of the month following receipt of all documentation At a group s anniversary only Change Contribution Option Once in a 12-month period 1. Letter from the group Group Demographic Change (Ownership change, split, merger or acquisition) Add Workers Compensation Plan First of the month following receipt of all documentation First of the month following receipt of all documentation 1. Letter from the group, including contribution and desired life amount or renewal documents, if available. 2. Employee Applications will be needed for any new enrollments who are not currently enrolled, or renewal documents, if available. Employee Applications may be required to underwrite coverage amounts over Guaranteed Issue. 3. If 10 or more are enrolling, the SIC code will be required. 1. Letter from the group indicating plan selections and contribution amount. 2. Employee Applications or renewal documents, if available. 1. Employer application and employee application or approved census enrollment spreadheet. 1. Letter from the group, including contribution and desired life amount or renewal documents, if available. 2. Employee Applications will be needed for any new enrollments who are not currently enrolled, or renewal documents, if available. Employee Applications may be required to underwrite coverage amounts over Guaranteed Issue. 3. If 10 or more are enrolling, the SIC code will be required. 1. Letter from the group Small Group Employee Application(s), requesting or declining coverage for all eligible part-time employees 3. Employer Application may be required 4. Current Quarterly State Tax Withholding Report 5. Statement of Understanding* subject to regulatory approval. Group name change with no new Tax ID number: 1. Letter from the group on company letterhead requesting the name change. 2. Fictitious Business Name Filing (Sole Proprietorship or Partnership), or amended Articles of Incorporation (Corporation) or amended Articles of Organization (Limited Liability Corporation [LLC]). Group name change with new Tax ID number: 1. A letter from the group on company letterhead requesting the name change. 2. New Employer Application. 3. Legal company documentation. Please note: Additional documentation and review may be required. Contact Employers Workers Compensation Insurance Specialists at Section 4 17

21 Definitions 1. Late enrollee A late enrollee is an eligible employee or dependent who has declined enrollment in a health benefit plan offered by a small employer at the time of the initial enrollment period provided under the terms of the health benefit plan, and who subsequently requests enrollment in a health plan of that small employer, except where the employee or dependent qualifies for a special enrollment period provided that the initial enrollment period will be a period of at least 30 days. Late enrollees may be subject to a 12-month waiting period and an effective date on the first of the month following receipt of the application. 2. Guaranteed association means a nonprofit organization comprised of a group of individuals or employers who associate based solely on participation in a specified profession or industry, accepting for membership any individual or employer meeting its membership criteria, and that (1) includes one or more small employers as defined in subparagraph (A) of paragraph (1) of subdivision (k) of Health and Safety code ; (2) does not condition membership directly or indirectly on the health or claims history of any person; (3) uses membership dues solely for and in consideration of the membership and membership benefits, except that the amount of the dues will not depend on whether the member applies for or purchases insurance offered to the association; (4) is organized and maintained in good faith for purposes unrelated to insurance; (5) was in active existence on January 1, 1992, and for at least five years prior to that date; (6) has included health insurance as a membership benefit for at least five years prior to January 1, 1992; (7) has a constitution and bylaws, or other analogous governing documents, that provide for election of the governing board of the association by its members; (8) offers any plan contract that is purchased to all individual members and employer members in this state; (9) includes any member choosing to enroll in the plan contracts offered to the association provided that the member has agreed to make the required premium payments; and (10) covers at least 1,000 persons with the health care service plan with which it contracts. The requirement of 1,000 persons may be met if component chapters of a statewide association contracting separately with the same carrier cover at least 1,000 persons in the aggregate. Section 5 18

22 Definitions 3. Qualified event enrollment period An eligible employee or dependent should not be considered a late enrollee if: a. The individual meets any of the following criteria: He or she, or his or her Dependent loses minimum essential coverage, as described in California Health and Safety Code Section (d). He or she gains a Dependent or becomes a Dependent through marriage, birth, adoption or placement for adoption. He or she is mandated to be covered as a Dependent pursuant to a valid state or federal court order. He or she has been released from incarceration. His or her health coverage issuer substantially violated a material provision of the health coverage contract. He or she gains access to new health benefit plans as a result of a permanent move. He or she was receiving services from a contracting provider under another health benefit plan for one of the conditions described in subdivision (c) of Health and Safety Code Section and that provider is no longer participating in the health benefit plan. He or she is a member of the reserve forces of the United States military returning from active duty or a member of the California National Guard returning from active duty service. He or she demonstrates that he or she did not enroll in a health benefit plan during the immediately preceding enrollment period because he or she was misinformed that he or she was covered under minimum essential coverage. Note: Coverage for individuals who apply during one of the specified special enrollment periods becomes effective: No later than the first day of the first calendar month beginning after the date the Plan receives the request for special enrollment; You have within 60 days from the qualifying event(s) to enroll. 4. New hires New hires are employees in groups who are hired after the group s effective date. 5. Takeover group/members These are all the eligible employees/dependents of an employer group who were covered as a group by a prior carrier. Section 5 19

23 Forms To access the forms and documents discussed within this guide, visit anthem.com/ca, click the Small Group tab, the Sales and Training tab and, under external links, West Small Group Supplies. Or, use the Easy Renew link provided under Important Contact Information to access both health care reform documents, as well as pre-health care reform documents. Form Form number 1-50 Employer Application 38400CAEENABC 1-50 Employee Application 37612CAMENABC Employee Change form Check By Fax form Eligibility Statement Statement of Understanding Exceptions to Standard Enrollment/Translator form Member Social Security Number Exceptions Request form Anthem Demand Debit Authorization (DDA) form Agreement for Health Reimbursement Accounts 3156BCAMENABC 12238CABENABC 12252CAEENABC 12250CAEENABC 12249CAMENABC 28645CAMENABC 20243CAEENABC 1-50 Agent Checklist 43043CABENABC Conditions of Enrollment Startup Companies/PEO Spin-Off Groups Guaranteed Association Attestation Contract Code List None 12378CAEENABC 44723CAEENABC 45639CABENABC Section 6 20

24 Anthem Blue Cross is the trade name of Blue Cross of California. Anthem Blue Cross and Anthem Blue Cross Life and Health Insurance Company are independent licensees of the Blue Cross Association. ANTHEM is a registered trademark of Anthem Insurance Companies, Inc. The Blue Cross name and symbol are registered marks of the Blue Cross Association.