Group Health

[OneMorePolicy]

Thank you Dave. The reason I asked about a spouse not named on the Schedule C being ok is that often he\she provides "gopher" services and clerical support but sees no reason to be named in the SP paperwork, especially since California is a Community Property state. Sounds like BC wouldn't accept that situation and converting them to a partnership or Corp would be better if they wanted BX? I would guess though that rather than going through the exercise of switching to a partnership for the sake of getting health insurance, the client would just as well be served by retaining their SP status and going with Healthnet? I have a difficult time imagining a company changing from its SP status for the sake of getting health insurance, but I guess if someone is "uninsurable", they gotta do it. PS--your posts are great!

 

[Dave020]

It seems to go both ways. The majority of businesses I have talked to want or are willing to change structure to accomodate the BX requirements. Now, certainly a long-existing mom&pop will be more reluctant, given industry and all, and often will not want to change it.

It is certainly nice to have a few good carriers to bring to the table to meet any contingency, and really I think with these threee (not counting WHA since they serve a very small area and Weiss gives them very bad marks), you can meet anyone's needs.

I agree that it is far less common in SPs to have both names on the schedule C, sometimes they are but often only one name is on there. If they have no EEs on payroll and want a real-world PPO (Kaiser has PPO, but use only CCN network which is not that large) then some kind of change is going to have to happen.

Change to Partnership/Corp is often a way to shorten the cycle. Since SPs only file annually, say right now next chance to change schedule C would be in spring of 2009. Often they don't want to wait out that long and will convert to a partnership to meet the more immediate 1/2 previous calendar quarter rule. I think that may be a bit towards the willingness to make that larger step.

Now there are some carriers that will NOT accept spousal groups, regardless of structure, without DE-6 employees. Those that come to mind are Delta Dental and VSP. It really is not the carrier in this case, but the "arrangement" or pool. Some carriers won't write below a certain amount (VSP - 10, Delta - 3+, Metlife 5-10 and so on). There are purchasing pools available to get that down to 2 lives, however those pools can set different rules, and usually won't do 2-life spousals).

For anyone interested, I used Wolfpack in Belmont, CA. Logan Wolf runs the shop and they can get you VSP and Delta down to 2 lives. VSP really is the demand vision product and it's nice to get it below VSPs 10 lives minimum rule.

Dave

 

[OneMorePolicy]

Change to Partnership/Corp is often a way to shorten the cycle. Since SPs only file annually, say right now next chance to change schedule C would be in spring of 2009. Often they don't want to wait out that long and will convert to a partnership to meet the more immediate 1/2 previous calendar quarter rule. I think that may be a bit towards the willingness to make that larger step. Dave

Question from the cheap seats, have you seen the client file an amended tax return so both spousal names are on the Schedule C, versus changing to a partnership or corporation, or don't go there? Seems like filing an amended return, if accepted by the carriers, would be a lot simpler.

Thanks too for mentioning Wolfpack. Is vision & dental really that good a seller for you too for these small groups?

 

[Dave020]

Question from the cheap seats, have you seen the client file an amended tax return so both spousal names are on the Schedule C, versus changing to a partnership or corporation, or don't go there? Seems like filing an amended return, if accepted by the carriers, would be a lot simpler.

Thanks too for mentioning Wolfpack. Is vision & dental really that good a seller for you too for these small groups?

I guess it could be done, never seen anyone actually do it. Most of the time they go in the other direction, often the LLC or Partnership is already formed and we just need to change that to add on the spouse as officer or partner.

I find most groups will buy a package including health, dental and vision (and often term life as well). Not everyone, but a lot. If they have even one or two W-2 employees, they will usually offer it.

Dave

 

[OneMorePolicy]

.... often the LLC or Partnership is already formed and we just need to change that to add on the spouse as officer or partner.
Dave

Glad to hear that amending an existing agreement is more common since that seems to be a tedious task versus changing the form of ownership which sounds more expensive and could be a possible dealkiller for other reasons.

If this "adding on the spouse" is done immediately, can insurance coverage commence in the usual time frame or are there extra snags and delays due to the amendment? In other words, just submit the amended document with the other required docs and you're on track as if the amended document didn't exist?

Also, prior to you meeting them, do these clients tend to have individual and\or no coverage until you switch them into group?

Thank you again for your help if you would.

 

[Dave020]

Glad to hear that amending an existing agreement is more common since that seems to be a tedious task versus changing the form of ownership which sounds like a possible dealkiller since that could open up a can of worms.

If this "adding on the spouse" is done immediately, can insurance coverage commence in the usual time frame or are there extra snags and delays due to the amendment? In other words, just submit the amended document with the other required docs and you're on track as if the amended document didn't exist?

Also, prior to you meeting them, do these clients tend to have individual andor no coverage until you switch them into group?

Thank you again for your help if you would.

The change of structure to add the spouse of other partner/officer falls under the same requirements in that it must be done for 1/2 of the previous calendar quarter. Same situation where a single-owner business hires the first employee, the legitimate (AB 1672) 2-person group did not exist prior to the hire, therefore it must exist in that capacity for 1/2 previous calendar quarter.

Usually in these situations we know our critical cutoff dates (2/15, 5/15, 8/15 and 11/15) which I have posted on my website. So either change to add partner/officer (spousal or otherwise) or addition of a payroll "2nd" employee needs to be inline with those cutoff dates to get GI next quarter (4/1, 7/1, 10/1, 1/1). With few exceptions, because of the way I do these groups, I tend to only enroll them four times per year (8 months to get them ready so to speak).

Most of the groups I have worked with were people with prior coverage who were on continuation (COBRA or Cal-COBRA). I don't think I've had one yet surrendering IFP for group (unless it was HIPAA).

One thing to note, in California (and probably other places) the lookback for creditable coverage is 63-days when going to individual but 180 days when going from group to group. So, someone who came off of group coverage has 6 months to get into a new group and get a full lookback of creditable coverage.

MRMIP recognizes the 180 lookback instead of the 63-day lookback.

Dave

 

[OneMorePolicy]

Many thanks Dave, you made it a great learning day! I'm scheduled to have my first meeting with the BX RSM next week and will better discuss small group because of today. Now have a lot more chances to write a policy since there's GI with small group. I actually have mentioned your name too and this website when I attended a BS seminar last month. Again, I'm very grateful. Maybe we can celebrate someday by yanking on those special vending machines!

 

[Dave020]

I think we have to invite JR (SalPro) if we hit the "vending machines" LOL.

Good luck and I am always glad to help when and if I can.

Dave

 

[Guest]

I have recently signed as an independent agent for Colonial but I think I want to go into group. Any thoughts on this?

 

[NewHealthStrategies]

I'd like to change direction here a bit and ask......

The reason I left corporate America (working with large group) was that I love the transactional side of the individual market (doing business over the internet) and I truly believe that small group is heading that way fast.... I'll go out on a limb and say it this way..... I beleive you could effectively market small group through consolidated, replicated websites like QuotIt or Norvax and using webinars....

Any thoughts?


......... my head hurts!