Small Group Options for 1099 Employees

Discussion in 'Employee Benefits Forum' started by kstein, Aug 8, 2017.

  1. kstein
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    kstein Well-Known Member

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    Talking to UHC, it seems they offer a small business plan for employers with 1099 employees only as long as the business owner attests to a handful of statements (like you aren't a seasonal business, person gets 80% or more of their total income from the 1099 position).

    Does anyone take advantage of this option or have any thoughts on creating small groups to avoid the ACA? I'm in Missouri.
     
  2. rcduggan
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    rcduggan Well-Known Member

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    You CANNOT create a company or a group for the sole purpose of receiving group benefits. Not sure what state you're in either but that 1099 offering is rarely pulled off. Most carriers in my state do not allow it for this simple reason- you must display an employer-employee relationship. Best of luck!
     
  3. junkman
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    junkman Well-Known Member

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    You can write the group if it legitimately meets the carrier guidelines. Talk to your group reps. They want to write business and will let you know the rules. The underwriter is the "no" person. The employer has to be consistent in the 1099 people included. You would not like to have a case rescinded.
     
  4. yorkriver1
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    yorkriver1 Well-Known Member

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    Ask about this with your available carriers: I have been reminded in my state carriers have a once a year "no participation requirements" for employer groups to sign up no matter how many employees do/don't enroll. They will still have to have 2 or more eligible (by carrier's definition, which varies), and for my carriers, not husband/wife. Parent/adult child is OK, if employed. Non participation dates: 11/15/17 to 12/15/17 sign up for 1/1/2018 effective date. This is with carriers that want EE's to be W-2 payroll and need a copy of the most recent quarterly state tax payroll report of EE's.

    I have 2 group prospects who are stymied by participation limits, since they don't want to/can't pay 100% of EE premium, and can't get 75% of the EE's to enroll, most of whom don't have coverage now. These are repair industries, not office.
     
  5. leevena
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    leevena Well-Known Member

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    When you say avoid ACA, that is vague to me. But you can have small groups in a self-funded vehicle, which avoids some of ACA. You could also aggregate multiple small groups into a self-funded program whereby the carrier will treat all of these groups as a single entity for pricing purposes. Each can be underwritten separately, issued different costs, and receive their own contract. This is somewhat involved and takes some knowledge, but in the end is relatively simple to do and operate. Need to work through a mgu, TPA, or carrier.

    Good luck.
     
  6. yorkriver1
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    yorkriver1 Well-Known Member

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    I would assume the OP means individual/family plan health coverage, ACA compliant on or off exchanges. Going to be a nervous market in many states this season.

    Lee, are you in a position to do the work you describe to put a self insured plan together for a group of employers?
     
  7. leevena
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    leevena Well-Known Member

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    Sorry, but do not understand the comment about OP.
    As for the work part, the easy part is working with the carrier to get them to set-up such a program. The difficult part is the work with the employer, or plan sponsor, to get them to buy-in.
     
  8. junkman
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    junkman Well-Known Member

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    They also need to understand that stop loss can run out and someone gets stuck with the claim.

    Dependent spouse files with Medicare only. Medicare pays then audits 2 yrs later. Claim gets kicked back to employer. Boom. Plan has no stop loss. Employer eats claim.

    The above example wouldn't apply to "small" employer but others could happen and you'd better understand the technicalities.
     
  9. leevena
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    leevena Well-Known Member

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    A good point to be made. But if you construct the plan correctly, including a time limitation on when claims need to be filed, your example will be a non-issue for the employer.
     
  10. kstein
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    kstein Well-Known Member

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    Correct. The group of one concept where they have other EE waive coverage can be a nice way to maintain a decent network and co-pays for common services. Also moving to mid yr deductible and price locks help keep the clutter down at end of year. I'm not dealing with self funded plans or anything really over 20 EE.
     
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