Steve Shorr Explanation of Participation Rules Pre - ACA
What are the Participation and Contribution requirements?
The Insurance Companies have participation & premium contribution rules as they are REQUIRED to write your company under Health Care Reform (AB 1083 ♦ §10753 et seq. Non Grandfathered Plans) regardless of the health status of the owner, employees or dependent and want to make sure that they get young & healthy employees along with those more prone to claims.
If an employer is not covering the employees… the health plan might not qualify as tax deductible business expense under IRS Code Section §106. The employer may require the employee to pay part of the premium, which can be deductible under IRC §125.
What are the rules of minimum participation & contribution?
Check out the Option during Annual Open Enrollment 11.15 to 12.15 where there are NO Participation rules!
Insurance Code §10753.06. (Health Reform – Non Grandfathered Plans)
Every carrier shall file with the commissioner the reasonable participation requirements and employer contribution requirements that are to be included in its health benefit plans. Participation requirements shall be applied uniformly among all small employer groups, except that a carrier may vary application of minimum employer participation requirements by the size of the small employer group and whether the employer contributes 100 percent of the eligible employee’s premium. Employer contribution requirements shall not vary by employer size.
A carrier shall not establish a participation requirement that
(1) requires a person who meets the definition of a dependent in subdivision (e) of Section 10753 to enroll as a dependent if he or she is otherwise eligible for coverage and wishes to enroll as an eligible employee and
(2) allows a carrier to reject an otherwise eligible small employer because of the number of persons that waive coverage due to coverage through another employer.
[some carriers will reject if the person waiving is the ONLY common law employee – call or email for your situation]
[Health Reform §2708 42 US §300gg requires that Employees be eligible within
90 60 days. DOL Guidance 2012-02 national underwriter.com Health Reform Facts Q & A 249 (email us for a copy) Learn More⇒ Our Page on waiting periods]
Definition – Minimum Essential Coverage 5000A (f)
Please note that while the law mentions that an employee that is covered under another group plan (spousal) doesn’t count towards the participation level, the practice has been, to include Medicare, VA – Veteran’s, for many companies, EVEN individual plans and Medi-Cal etc.
Some Insurance companies might consider the non union employees as guaranteed issue, if the employer is mandated under a collective bargaining agreement to contribute to Union Labor Fund. Blue Shield Quick Underwriting Guideline Page 5
Extra 6 week or more waiting period for Part Timers SB 1790 – Insurance Code §10700 f 1 d
Related Pages in Participation & Contribution Requirements Section
If an employee opts out, the employER may not reimburse him for it. and it’s a $100/day fine!
Check out the rules on Plan Anniversary, late enrollee and Open Enrollment in the Administrative Guide for the Insurance Company that you select. This is another way that adverse selection is avoided, one must be on the plan for the entire year, not just when you are ready to turn in a claim.
- Enforcement – Participation – Recertification
- Get Quotes & Details of Participation & Underwriting Rules
- Management Carve Outs
- Proof you are a qualifying Employer & legitimate business
- Special Annual Open Enrollment – NO Rules!