06/02/2008
Small Employer definition change impacts quotes and forms
Under recently passed legislation (HB 2560), the definition of a small employer changed per RCW 48.43.005(24) to reflect the federal definition as follows, effective June 12, 2008:
"Small employer" or "small group" means any person, firm, corporation, partnership, association, political subdivision, sole proprietor, or self-employed individual that is actively engaged in business that employed an average of at least two, but not more than fifty employees, during the previous calendar year and employed at least two employees on the first day of the plan year, is not formed primarily for purposes of buying health insurance, and in which a bona fide employer-employee relationship exists. In determining the number of employees, companies that are affiliated companies, or that are eligible to file a combined tax return for purposes of taxation by this state, shall be considered an employer. Subsequent to the issuance of a health plan to a small employer and for the purpose of determining eligibility, the size of a small employer shall be determined annually. Except as otherwise specifically provided, a small employer shall continue to be considered a small employer until the plan anniversary following the date the small employer no longer meets the requirements of this definition. A self-employed individual or sole proprietor who is covered as a group of one on the day prior to June 10, 2004, shall also be considered a "small employer" to the extent that individual or group of one is entitled to have his or her coverage renewed as provided in RCW 48.43.035(6).
Group eligibility (pool) is determined as follows:
Group eligibility is based on group size which is determined by the average count of the total number of employees who were on a group's payroll and those individuals that were employed by an affiliated company during the previous calendar year. A group that was not in business during the previous calendar year would base their group size on the current calendar year. The term "employee" means any individual employed by an employer, regardless of the number of hours worked per week, excluding contracted 1099 individuals.
Employees eligible for coverage are determined as follows:
An employee eligible for coverage is required to work a minimum of 20 hours per week, or greater as defined by their employer's Group Master Application.
Additionally, to support this change, we have updated several forms that you and your clients must begin using immediately:
- Group Master Application
The 7/08 version of the Group Master Application has been updated. We will accept the previous form submitted for groups with effective dates of July 1 that have already submitted these forms to us for processing.
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Product
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Group Size
2 to 99
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Medical: InnovaSM and EngageSM
Dental: EncoreSM, ExpressionsSM and RadianceSM |
Group Master Application |
- Group Size Certification (formerly known as Annual Group Certification)
We will mail a Group Size Certification form to the group 150 days before their renewal. In order to renew your client's coverage, we will need to receive the completed form so we can satisfy state and federal insurance regulations applicable to small groups.
On May 29 we mailed the Group Size Certifications for groups renewing as of September 2008. Please encourage your clients to return the form as quickly as possible so their renewal is not delayed.
If you have any questions about the definition of a small employer, please talk to your Regence Sales contact.
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