Small Group Options for 1099 Employees

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

  1. junkman
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    junkman Guru

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    I used to think that however, a COBRA eligible group per federal law is primary with Medicare and per federal law, the employer would eat the claim. This happened on a large fully insured group and we simply dropped it on the carrier. Stop losses would have run out unless they had a 12/36 or 48 contract.

    One reason HDHPs were so good for individuals isn't that you get a spec = the EE out of pocket and an agg = the family OOO.

    Another issue with self funded isn't no carrier isn't required to offer a renewal and can exclude coverage on a particular insured.

    We also had an employer in financial trouble that went ASO against our recommendations because they could hold the reserves. The problem came when the contract ended. An ASO contract is for 12 months with monthly payments. They couldn't renew because the plan ended and they had no one to administer the run out.

    Another company with young employees bought administration and a network with no stop loss at all - not even an agg. They ran fine - until they didn't. "Didn't wiped out more than they saved.

    People selling self funded say "If it's set up right" or "almost never happens".

    Insurance is statistics and we are a random variable. Be careful and understand what you have (and sell).
     
  2. leevena
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    leevena Guru

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    Thanks for that, I do not remember ever having a situation like that. Have a good day.
     
  3. junkman
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    junkman Guru

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    Now ACA rates are so bad that I'm considering for some husband/Wife client's that are getting hammered on rates. They have the highest OOO available and it's still high.

    I'll have to find the source but a couple plans have come calling. There would be no tax penalty and these people can handle the high deductible. Next year options are unknown regardless of what plan they have.

    This is about keeping friends covered. Individual health is not a revenue stream in TN.
     
  4. tarobson23
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    tarobson23 New Member

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    I write several UHC policies each month. As long as they are fulltime they require you to file out there own carrier specific 1099 form that requests the hire date,name of contractor(s) and SSN#. Great for small single member LLC
     
  5. yorkriver1
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    yorkriver1 Guru

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    So, are we saying that the owner has at least one 1099 "employee", who is waiving coverage, so the owner gets to be eligible for group?

    UHC is super diligent in my state about making sure that the group is eligible by who is full time, part time, etc. Their participation requirement is 50% of all eligibles, including those covered elsewhere, unless the other coverage is Tricare. I guess if it was owner +1, then that would be 50%, if the worker waives. Thing is, there has to be someone outside the family as worker #2 besides owner. Spouse can't be employee #2.
     
  6. LSmith16
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    LSmith16 New Member

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    I am not sure if you are only looking for major medical for benefits, but I am an Aflac agent and we are allowed to offer benefits to groups with at least 3 members and they can all be 1099. I know each company has their own standards and you will just need to reach out to someone from each.
     
  7. rcduggan
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    rcduggan Super Genius

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    just to be clear, a 1099 is defined not as an employee but a contractor. in your example of the owner only group and a 1099 second eligible "waiving" is not accurate, assumed your 1099 is eligible in the first place. here's why- the participation is 100% if there's 2 eligible and 1 valid waiver. keep in mind, owner only groups are rarely allowed in the first place. if you're attempting a 1099 as your second eligible in a group of 2 and the 1099 waives because they simply do not want to the coverage or the employer doesn't want to pay for them, then you're accurate at 50%, again assumed the 1099 is eligible in the first place. i've been writing employer group for more than 10 years and do not have a single group covering 1099's or been put in a position where this is even a conversation.
     
  8. TN_agent
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    I have a situation where it is an S corp with only 1099 employees (a consulting firm). 6 consultants, 3 taking the insurance, 2 of them the owners (who are paid a 1099 salary through the business). My rep said they WOULD write that group, at least in my state.
     
  9. rcduggan
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    rcduggan Super Genius

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    i reviewed my underwriting guidelines and there is one carrier that will accept those terms, that is UHC.
     
  10. TN_agent
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    Yep. We are seeing a lot of groups with 1099 paid employees expressing interest. They are mostly sales type groups that pay their people 1099 on commission, real estate offices, financial planners, etc. Previously their people were on their own for insurance, but now that prices are crazy in TN if you don't get a subsidy, they are interested in seeing if they qualify for groups. They aren't forming the groups just to get the insurance, these are bona fide businesses.
     
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