Have Small Group Break Ups Accelerated?

[bill3173]

Left a message with a secretary last week for the owner to call me, this was a semi-cold call for small group. I thought that it was such a waste of my time that I didn't even record it.

3 days later the guy calls me and wants to talk, not about small group but individual. He'd made his mind up to dissolve it, period. I took his info. and he told me that he'd have all of his emps call me.

They're all in their 30's and getting approved about as fast as I can submit them.

After he and his partner were approved, he called just to let me know that his prior group agent, didn't really offer him anything other than another group policy.

Group only agents, please keep up the good work. Take a stance of group or nothing, it really helps those of us that are ambidextrous.

 

[DS4]

Who is paying the premium on these individual policies? The employer, or, the employee?

 

[VT Hokies]

If the employer is still contributing, the group could run into some problems come claims time.

 

[DS4]

If there is an employer/employee relationship, and, the employer writes a check for the employee's individual plan, this becomes taxable income to the employee.
There are other problems too.

 

[HealthGuy]

There are NO problems breaking up a small group and going individual, period.

 

[DS4]

There are NO problems breaking up a small group and going individual, period.

Yes, as long as the employee pays the premium.
And, no one get denied, waivered or rated.

 

[HealthGuy]

And so what if the employer pays them extra to buy their own.

 

[DS4]

And so what if the employer pays them extra to buy their own.

I have no problem with that.

I have an employer this very minute that has many pissed offed employees. This employer owns a body shop. Because of several years of continual premium increases on his group health plan, the employer cancelled. He then gave everyone a $200/month credit towards their own IFP. Out of his 13 employees, 4 were declined for IFP. The other 9 bought IFP plans from various agents. I was the agent on 2 of the policies. I specifically told the employer not to commingle employer monies with the premium statement. Each month, the employee would bring their premium statement to the employer. The employer would write a check to the ins co for $200, and, the employee would write a check for the balance. This arrangement has been going on for 8 years. Recently the employer was audited by IRS. Now, IRS is going after the employee's for back taxes on the monies paid by their employer towards their personal IFP.
The other problem you expose( however minimal) yourself and the employer to is this. Group Health Plans guarantee issue coverage, and, cover maternity.
IFP is underwritten, and, most IFP plans now exclude maternity. At least in California.
Lets play this out.
Someone goes to work for this employer and gets denied coverage?
Or, they have a baby and normal maternity is denied.
Since the employer is paying for the premium, with an employer check, does this constitute a group health plan?
I want no part of this.

 

[bill3173]

DS4, You make a very good point, however, based on what I've been told, this is a clean break-up. The employer is dissolving the group, and there is no employer subsidy. He simply cannot afford to pay for their insurance, but the good news is that they all keep their jobs, and I've heard no complaints from any of them.

It appears that they're all going to get approved. I know that this doesn't happen every day. Just happened to be a relatively young group. There are only 5 emplyees.

There's no law against an employer dissolving a group and asking an agent to speak to his employees, or at least none yet.

Under the current administration though, you never know. If the liberals could have their way, all non gov business activity would be illegal.

 

[Full Throttle]

And so what if the employer pays them extra to buy their own.

In my state, if the extra is tied to health insurance, it's illegal. That being said, what are the odds of getting caught? However, it only takes one disgruntled employee and an alert attorney.