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A CONSUMER'S GUIDE TO SMALL EMPLOYERS HEALTH INSURANCEA Guide for Employers With 50 or Fewer Employees
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Small employer health insurance is available in Maine from several insurers and health maintenance organizations (HMOs).This publication is meant to help small employers understand their options and to provide a comparison of some premiums available in the health insurance marketplace. Who Is Eligible? A small employer is one with 50 or fewer eligible employees. Eligible employees are those who work 30 or more hours per week. At the employer's option, part-time employees working as few as 10 hours a week may be considered eligible. Also, at the employer's option, retired employees may be included. By law, any insurer or HMO in the small employer health insurance market must agree to provide coverage to any small employer who applies, as long as a sufficient percentage of eligible employees and their dependents participate. The insurer or HMO cannot require more than 75% of employees and dependents who do not have other coverage to participate. A self-employed individual is eligible for health insurance from the insurers shown in this table. If one of these insurers also offers individual health insurance in Maine, that insurer may offer the self-employed individual an individual policy instead of a small group policy. Continued Coverage for Dependent Children up to age 25 - Effective September 20, 2007, individual and group health insurance policies must offer to continue coverage for a dependent child up to the age of 25 at the option of the employer. The extension of coverage is not automatic for children of the employee unless the employer has specifically chosen to offer the coverage. If the employer offers the coverage, children may be added only during open enrollment (there are limited exceptions). To qualify for the extended coverage, the dependent child must be unmarried; have no dependents; is a Maine resident or enrolled as a fulltime student; and not have health coverage under another policy or under a federal or state program. If you believe that you are eligible for small group health insurance but have been declined for a small group (or an individual) plan by any of the insurers shown in the table, please make a note of the name of the person you spoke to at the insurance company and contact the Consumer Health Care Division of the Maine Bureau of Insurance at one of the phone numbers or the address on the front page of this Guide, or online. What is Available? Most insurers offer many different plans. Plans may vary as to the services covered, the level of benefits that are paid and the extent of managed care provisions. Managed care refers to a variety of provisions intended to avoid paying for unnecessary or extravagant care. The general types of plans available are:
Are Pre-existing Conditions Covered? Employees and dependents who had no coverage during the three months before their new coverage takes effect may be subject to a pre-existing condition exclusion of up to 12 months. This means that any health condition other than pregnancy for which medical advice, diagnosis, care, or treatment was recommended or received during the six months before the effective date will not be covered for 12 months. However, those who had coverage at any time in the prior three months are protected by Maine's "continuity law." This law prohibits the exclusion of pre-existing conditions except to the extent they would have been excluded under the prior coverage. An employee or dependent who did not enroll in the employer's plan when first employed, but wishes to enroll later, is considered a "late entrant." Late entrants may be subject to a 12 month pre-existing condition exclusion, or may be required to wait an additional 12 months before enrolling. However, a person will not be considered a late entrant if they initially did not enroll because they had other coverage and that coverage terminates for one of several reasons specified by law. These reasons include loss of coverage through a spouse's plan due to death, divorce, termination of employment, or termination of the group plan. Also, when an employer gains a new dependent through marriage, birth, or adoption, they have a 30 day special enrollment period when they will not be considered a late entrant. How Much Does It Cost? Rates cannot differ based on gender, health status, claims experience, or policy duration. Rates can vary based on age, industry and geographic area, but the variation may not be more than 20% above or below the "community rate" for all of these factors combined. The community rate is set by the insurer or HMO and will be different for each insurer and for each plan of benefits. It will also differ for different family structures. Typically there is one rate for individual employees, another rate for an employee with children, a third rate for an employee and spouse and another rate for an employee, spouse and children. Rates may also vary based on the size of the group or based on tobacco use. Employers should be aware of an option that may make employees' contributions to health insurance plans more acceptable. Employees may set aside pre-tax money to pay for insurance premiums or health care expenses. IRS Code Section 125 allows employees to make their employee health benefit plan premium contributions with pretax dollars (known as a Premium Only Plan). The employer may also set up a fund to include a Health Care or Dependent Care Reimbursement Account. Employees are then able to set aside pretax dollars to pay for medical expenses (that are not covered or otherwise reimbursed) and/or child care expenses. The employee decides each calendar year how much to set aside for that year and funds their account with a pretax contribution each pay period. The employee then makes a claim for reimbursement by submitting proof of incurring a qualifying expense. Any money left unclaimed at year end is forfeited so be cautious in committing an amount to be set aside. Anyone interested in these types of funds should contact a tax attorney, CPA, or other qualified professional. Another alternative is a health savings account (HSA) which, unlike a Health Care Reimbursement Account, can carry over from year to year. See the section above under “What is Available” for further information on HSAs. Rate Comparison Chart The rate comparison chart should be used as a guide only. Companies may offer other plans than those shown in this brochure. Also, do not assume that insurers showing low rates on this chart are necessarily the lowest cost in all situations. For instance, some insurers charge higher rates for smaller groups and lower rates for larger groups to reflect expense savings. Other insurers use the same rates for all groups within the small employer market. Be sure to compare benefits and premiums carefully when considering different plans. In addition to benefits and premiums, service is important to consider when shopping for insurance. A company providing superior service may be worth some additional cost. The following charts show each insurer’s monthly community rates for typical plans. The benefits for each plan are those shown in this table, unless otherwise noted. Companies and Premiums Please use these rates only as a guide as companies' rates often change more than once a year. The rates shown assume a 10 member group and were last revised on July 1, 2008 and are monthly rates. HMOs
HMOs
HMO Point of Service Plans
HMO Point of Service Plans
PPOs
* Plan includes separate $10/$30/$45 drug benefit and $20 office visit co-pay ($25 specialist) PPOs -When deductibles plus coinsurance paid during a calendar year reach the out of pocket limit, no further coinsurance has to be paid. PPOs
* Plan includes separate $10/$30/$45 drug benefit and $20 office visit co-pay ($25 specialist) PPOs -When deductibles plus coinsurance paid during a calendar year reach the out of pocket limit, no further coinsurance has to be paid.
Indemnity Plan A
* Plan includes separate $10/$20/$30 drug benefit Indemnity Plan A
*Plan includes separate $10/$20/$30 drug benefit Indemnity Plan B
**Plan includes separate $10/$30/$50 drug benefit with $250 deductible Indemnity Plan B
**Plan includes separate $10/$30/$50 drug benefit co-pays with $250 deductible The Bureau of Insurance Printed Under Appropriation No. 014 02A 3041 012 The Bureau of Insurance, within the Department of Professional and Financial Regulation, regulates the insurance industry for solvency and consumer protection. It does so through its examining and licensing procedures, by reviewing rates and coverage forms, conducting audits, and by sponsoring programs that enhance awareness of and compliance with State laws. The Bureau has statutory authority to enforce the State's laws and rules pertaining to insurance, and it initiates investigations and holds hearings concerning possible infractions of them.
Last Updated: July 22, 2008 |
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