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15.13 Group Accident and Health insurance

Multiple-Employer Welfare Arrangements (MEWAs)​

Multiple Employer Welfare Arrangements (MEWAs) are typically established by larger employers to secure more favorable life and health insurance rates. These arrangements are commonly made up of employers that self-fund health insurance benefits for their employees.

MEWAs may provide benefits only to participating members, the employees of those members, and their dependents. Individuals who qualify for continued coverage under COBRA may also be eligible to receive benefits through a MEWA.

In Ohio, a MEWA must satisfy one of the following enrollment standards:

  • At least 300 employees representing 2 or more employers
  • At least 300 self-employed individuals
  • At least 300 workers, consisting of any combination of employees and self-employed individuals
  • Qualification as an Employee Association Health Plan

An Association Health Plan (AHP) is a health insurance plan sponsored by an association for its members and their employees. These plans are commonly established by trade, industry, or professional associations. Small businesses that belong to the association may participate in the AHP to provide health insurance coverage for their employees. In Ohio, AHPs are classified as MEWAs.

Blanket Insurance​

Blanket sickness and accident insurance provides coverage for certain defined groups of individuals, including:

  • Passengers traveling on a common carrier
  • Groups of employees exposed to specific occupational or exceptional hazards
  • Students or teachers at a college, school, or other educational institution
  • Members of volunteer fire departments, volunteer first aid organizations, or similar volunteer groups

Individuals covered under a blanket sickness and accident insurance policy are not required to complete individual applications, and the insurer is not required to provide certificates of coverage to each covered person.

All benefits payable under a blanket sickness and accident insurance policy must be paid to the insured individual, the insured’s designated beneficiary, or the insured’s estate. However, if the insured is a minor, benefits may instead be paid to a parent, guardian, or another individual who is actually supporting the minor.

This provision does not alter or limit the legal responsibility of policyholders for the death of or injury to any member of the covered group.

Employer Group Health Insurance​

Continuation of Coverage under COBRA and Ohio-Specific Rules​

Group insurance policies issued in Ohio must allow eligible employees to continue hospital, surgical, and medical coverage for up to 12 months following termination of employment. However, the continuation coverage is not required to include dental benefits, vision care, prescription drug coverage, or other supplemental benefits beyond hospital, surgical, or major medical coverage.

Eligible employees are individuals who:

  • Have been continuously covered under a group policy during the 3 months immediately preceding termination of employment
  • Are entitled to receive unemployment compensation benefits at the time employment terminates
  • Are not eligible for Medicare or any other group coverage arrangement under which they were not covered immediately before termination of employment

At the time an employer notifies an employee of termination of employment, the employer must also inform the employee of the right to continue coverage, including the cost required to maintain that coverage.

The employee must submit a written election to continue coverage and pay the initial premium within 31 days after the date the employee’s coverage would otherwise end.

During the continuation period, the employee is responsible for paying the premium contribution required by the employer, which may not exceed the group rate for the continued coverage.

An employee’s right to continue coverage, as well as the continuation coverage itself, will terminate upon the occurrence of any of the following:

  • The employee no longer meets eligibility requirements
  • A period of 12 months has passed since the date coverage would otherwise have ended due to termination of employment
  • The employee fails to make premium payments on time
  • The group policy is terminated

This section does not apply to an employer’s self-insured plan when federal law prevents the section from applying to those plans.

Waiver of Coverage​

Employees may choose to decline employer-sponsored health insurance by signing a waiver of coverage. When an employee waives coverage, dependents generally cannot be enrolled under the employer’s health plan. In addition, employees who decline employer coverage that is considered affordable and provides minimum value under the PPACA are not eligible for government subsidies to purchase individual health insurance coverage.

Small Employer Medical Plans​

A small employer is an employer that averaged between 2 and 50 eligible employees during the previous calendar year and has at least 2 employees on the first day of the current plan year.

Eligible Employee/Availability of Employees​

An eligible employee is an individual who regularly works 30 or more hours per week. The term does not include temporary employees, substitute employees, or seasonal employees who work only during certain parts of the year due to natural conditions or seasonal business needs.

Eligible employees who do not enroll during their initial enrollment period may later obtain coverage as late enrollees.

Open/Late Enrollment​

An eligible employee or dependent who enrolls in a small employer health benefit plan outside of the initial enrollment period or an applicable special enrollment period is considered a late enrollee. Every health benefit plan must include provisions for a special enrollment period.

At least once every 12 months, a carrier must offer late enrollees an opportunity to enroll in the health benefit plan. This enrollment opportunity must remain open for at least 30 consecutive days. Any applicable waiting period begins on the date the insurer receives the late enrollee’s application or request for coverage.

Service Waiting Period​

A waiting period is the period of time an employee must wait after beginning employment before becoming eligible for benefits offered through a small employer’s health plan. The waiting period may not exceed 90 days.

Guaranteed Issue​

A carrier is required to make every health benefit plan it actively markets available to any small employer that applies for that coverage.

At the time of initial group enrollment, each health benefit plan must offer coverage to all eligible employees of the small employer without imposing a service waiting period.

Renewability​

If a carrier provides coverage in the small employer market through a group health benefit plan, the carrier must renew or continue the coverage at the discretion of the plan sponsor.

A carrier may cancel or refuse to renew coverage for an eligible employee or dependent who has engaged in fraud or made a material misrepresentation. However, cancellation or nonrenewal cannot be based on any health status-related factor affecting the employee or dependent.

Premium Rates​

Premium rates charged for the same or comparable coverage under a health benefit plan for any small employer may not differ from the applicable midpoint rate by more than 40%.

An insurer may provide a low-claims discount of up to 5% below the midpoint rate for small employers that demonstrate favorable claims experience.

If premium rates exceed the applicable midpoint rate by more than 40% (or more than 35% when a 5% low-claims discount has been applied), any premium increase for a new rating period may not exceed the combined total of the following:

  • Any percentage change in the premium rate between the first day of the previous rating period and the first day of the new rating period
  • Any adjustment resulting from changes in the small employer’s case characteristics or plan design

A small employer carrier must consider all health benefit plans issued or renewed within the same calendar month to share the same rating period.

Disclosure Rules​

Each insurer offering a health benefit plan to a small employer must include the following disclosures in its solicitation and sales materials:

  • The insurer’s authority to modify premium rates and the factors that may influence premium changes
  • The policy provisions regarding renewability of coverage
  • The provisions related to any pre-existing condition exclusions
  • The benefits and premium amounts available under all health benefit plans for which the employer qualifies