The thing that has always been a crack in small companies entering group health plans is the participation requirements. Demographics come in to play. A small woodworking shop will most likely have a different census than an administrative office.
Many of the woodworking employees will most likely be on their wives plans. That dilutes the remaining people who will be participating in a group health plan. I do a lot of PC work in the construction industry and have seen the participation agreement to hinder many small contractors from offering a group plan. I have a current example: Thirteen employees: only five will be participating and in fact the two owners are on their wives plans and pay none to minimal premium toward such plans.
Every group carrier I know of want 50% participation and no waivers will be given in such small groups.
Just to get the business, we (at least I have) have seen there are agents that will be not exactly truthful with participation requirements. Such a move creates a big liability for the agent and possibly the company. When that big $$$ shock claim rolls in and the insurance company snoops around, if an audit is done and it is found that the group never would have been given a group plan....then the crap happens.
From the insurance company stand point I understand the adverse selection protection of the participation requirements. I've never been a fan and not sure if I believe 100% of their reasoning.
But I wonder what is going to happen once Obama Care starts requiring group insurance. I am guessing the insurance companies will drop the long standing participation agreements.
Many of the woodworking employees will most likely be on their wives plans. That dilutes the remaining people who will be participating in a group health plan. I do a lot of PC work in the construction industry and have seen the participation agreement to hinder many small contractors from offering a group plan. I have a current example: Thirteen employees: only five will be participating and in fact the two owners are on their wives plans and pay none to minimal premium toward such plans.
Every group carrier I know of want 50% participation and no waivers will be given in such small groups.
Just to get the business, we (at least I have) have seen there are agents that will be not exactly truthful with participation requirements. Such a move creates a big liability for the agent and possibly the company. When that big $$$ shock claim rolls in and the insurance company snoops around, if an audit is done and it is found that the group never would have been given a group plan....then the crap happens.
From the insurance company stand point I understand the adverse selection protection of the participation requirements. I've never been a fan and not sure if I believe 100% of their reasoning.
But I wonder what is going to happen once Obama Care starts requiring group insurance. I am guessing the insurance companies will drop the long standing participation agreements.
