Eligibility Question/Discrimination Related

[mgraves]

Greetings all!

I have an eligibility/discrimination question. I have a group that has 5 salaried employees and 15 hourly employees. There are looking to only offer an employer sponsored/paid health plan to their salaried employees. Is this possible and do you have any links to support it?

Thanks!

 

[leevena]

You are ok with this, if you are fully insured, for the time being. Fully insured plans have always been allowed this leadway. Just make sure you treat all employees in the "eligible group" the same.

Section 105(h) prohibits this type of "discrimination" in self-funded plans only. However, as of today, PPAC will extend this non-discrimination requirement to fully-insured plans. Since you are planning on instituting this now ( or so it appears ) you will not be protected by the grandfather clause in PPAC.

 

[mgraves]

Thanks leevana!

That was what I thought as well but I am getting a bit of grief from my carrier rep.

I appreciate your opinion. It is always nice to have that reassurance!

 

[stuy119]

Some carriers won't allow it.

 

[Dave020]

And, some carriers that allow it will fully underwrite the carve-out segment and can decline it for medical underwriting.

If your carriers have published agent underwriting guides for small group, it would be covered in there under "carve out" or "management carve-out" rules. If not, you need to check with an UNDERWRITER at the carrier and find out how they treat carve-out groups.

 

[leevena]

Each of the other posters are correct. Check with your carriers and find out. If you cannot do this with your carriers you will need to find an self-funded plan, if available, in your market. Look for a agg only or spec agg product. With only 5 ee's it may be impossible.

 

[somarco]

Rather than trying to bend the group rules why not just set up a list bill?