Friday, May 25, 2018

What's the Big Deal?

Our friend and colleague David Fluker tipped us to this Sunshine Golden* State news:

I replied that this was, indeed, a big deal, and several folks asked me why.

It's actually kind of interesting (well, to me, anyway):

Carriers in the group market - and particularly in the small group space - are often subject to something called "adverse selection." This occurs when a company buys a group plan, but only those with health issues actually sign up (or mostly those). As one can imagine, this isn't good for he carrier or,m really, the employer. A significant wand effective way to mitigate against that is to require that a minimum number (and/or percentage) of the employees sign up.

But what if Joe is already has coverage through his wife's employer, or the VA? Well, then he has what's called a "valid waiver;" essentially a "hall pass" to opt out, and not affect the group's eligibility.

But what if he has an individual medical plan instead. This gets tricky: depending on the circumstances, some carriers don't consider this a valid waiver and it does count, potentially threatening the group's eligibility (and thus whether or not the carrier will issue a plan).

So this decision by Anthem California could be a big boost to small employers looking for a group plan.

* Thanks, Bob!
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