Manage Expectations

 

Insurance agents who manage their client’s expectations successfully, tend to make the sale and also retain those clients for a longer period.  I have seen the case where an agent has not taken the time to explain the whole process with a group and when an issue occurred resulting in a higher premium, the agent lost the group to another agent.  Taking a little extra time to explain the process and answer questions, cements the relationship with your client and provides a measure of comfort by removing some of the unknown that may concern a business.  In the event that an issue arises during underwriting, the client at least has an awareness that this is not abnormal and may be more comfortable providing any additional information or accepting the underwriting result.

The Group Enrollment Process

Now, the employer wants to proceed with applying and enrolling for a group plan.   This is the time to explain the process of collecting the initial paperwork which will be reviewed for completeness and missing information.  Your MIBS customer service representative may request additional information or explanations during their initial review.  After submitting the enrollment paperwork, the carrier may come back and request additional documentation to answer any questions that may arise from the information provided.  This may occur more than once if the carrier has any questions on the additional submitted information.  Group coverage is not effective until the group receives their Welcome Letter from the carrier.

 

Next, understand what is the Group Health Plan contract?  The enrollment paperwork submitted by the employer, including the employee applications, constitute the legal contract between the carrier and the employer.  Therefore, carriers require that all forms be completed correctly and completely, signed by the authorized member and dated.  All of the aforementioned paperwork together documents the selections the employer and employees make and once the group plan is approved, legally binds the carrier to provide the selected coverage.  The information collected in this contract is very important for the insurance carrier to make sure the plan is set up in accordance with all of the rules from the various governmental agencies (Department of Labor, Medicare, State Department of Insurance, etc.).

 

 

Initial Paperwork

Each carrier has their own employer forms that must be completed.

  1. Benefit Program Application (BPA) – employer application which provides the information about the employer, effective date of plan, waiting period selection, employer contribution, etc. There are different BPAs for small group and non-regulated small group.
  2. Benefit Plan Selection (BPS) – form which lists the plans and products selected. There are different BPSs for small group and non-regulated small group.
  3. Employer Group Information (EGI) – determines the size of the group at time of enrollment so the carrier can determine how claims are paid for a Medicare eligible employee and also the market segment. The number entered in Section D, #1 will determine what market segment the group will be placed.  For groups with less than 20 total employees, Medicare is primary and groups with 20 or more total employees, the group health plan is primary
  4. IL Extension form for groups 51+
  5. Owners Certification form -use if owner or partner are not listed on the UI 3/40.
  6. Binder check or EFT for first month’s premium
  7. Illinois UI 3/40 (most recent quarter) – this is the state of IL’s required document the employer completes listing the employees with their paid wages for each quarter that is filed to the IL Department of Employment Security. This form needs to be reconciled by writing FT –full time, PT-part time and T for termed by each listed employee.
  8. This document is used to prove employees are eligible for group coverage. An employee must be compensated by the employer to be an employee.
  9. New hires not listed on this document will need to provide a copy of their latest paystub and copy of their signed W-4 form.
  10. Newly formed companies that have not filed a UI 3/40 yet, must submit a letter on company letter head stating when the company started and listing the current employees with their current employment status (FT, PT or T).
  11. Copy of sold quote (for 51+ groups). The group’s enrollment will be linked to this quote and if there is no difference in demographics from the quote census and the enrolled employees, then the rate should not change.  However, if there is any change between the enrolling employees and/or dependents (addition of employee or dependent not on the quote or employee on the quote not taking coverage) from the census, the premium rates may change.
  12. Employee application for enrolling and waiving eligible employees for small group. Excel list for groups over 51 employees.
  1. Employer Group Application – employer application which provides the information about the employer, effective date of plan, waiting period selection, employer contribution, etc.
  2. List enrollment for employees (spreadsheet)
  3. Sold quote
  4. Attestation Form if submitting the case less than seven business days prior to the effective date
  5. Most current prior carrier bill for groups with over 50 total employees
  6. ACH form for binder payment (optional, if not submitted the group will be billed; ACH ensures premium is paid in a timely manner)

Examples of additional documentation and why it may be needed:

  1. Articles of Incorporation or Partnership Agreement – These are legal documents registered with the state and IRS verifying how the business is set up and how the business files their taxes. This is required for a newly formed business or may be requested to verify eligibility for group coverage.
  2. K1-Form, 1065, 1120 – these are the tax document that a business files with their business tax return listing compensation paid to a partner or owner of a business. If an owner or partner is not listed on the UI 3/40 but enrolls in the group health plan or signs the employer forms, the carrier will ask for this document to verify that they are eligible to enroll or authorized to sign.
  3. Letters of explanation – Underwriting may request an explanation from the employer about a question on the submission paperwork. This letter must be on the group’s letterhead and signed by the authorized officer.  Example questions include:
  • There are different addresses on the binder check, UI 3/40 and employer forms. Why?
  • The owner’s wife signed the employer forms but is not listed as an employee. Why?
  • The owner could not provide proof of compensation for themselves. Explain why?
  • New businesses may need to explain their situation, start-up date, any date discrepancies between start-up date and start of payroll, owner compensation and list of current employees.
  • There are different business names on the binder check, UI 3/40 and employer forms.
  1. SS-4 Form – This is the document from the IRS that lists the assigned business Employer Identification number. New businesses are required to provide this document.  BCBS requires that a business be registered with the State of IL and the IRS to be considered eligible for group coverage.
  2. Jessie White letter – this is the letter the group receives when they have registered their business tax ID with the Illinois Department of Revenue.

When MIBS has completed the initial scrubbing for a BCBS group

 

Once all of the enrollment paperwork is complete and MIBS has determined that the initial paperwork is in good order, the information will be entered into the BCBS IL system and an account summary will be generated.  This document summarizes the employer’s information, employees enrolled and their plan selections as well as confirming the premium rates.   This should be sent to the employer to verify that all of the information is correct:

  1. Employee and dependent names are spelled correctly
  2. Date of births are correct
  3. Plans selected are correct
  4. Employer information is correct
  5. Premium rates are approved

***The Account Summary does not bind coverage. ***

Any change to the demographics from the quote can result in a change to the rates.

The account summary does not mean that the group is approved.  BCBS still has to review the paperwork and could come back and require additional information.  The group is not approved until the group receives a Welcome Letter.  ID Cards will not be available until after we receive the Welcome Letter.

If everything is correct, the employer should sign the summary verifying that the information is correct and can be released for full review by the BCBS underwriters.   Once the group is released for underwriting review, no changes can be made.  As the full underwriters review the documents, they may still request additional information.   When BCBS approves the group, they will send out a Welcome Letter and ID cards.  The group will be able to register on Blue Access for Employers where they can:

  1. Set up EFT for continuing payments for monthly premium
  2. View monthly invoices and payments
  3. Find plan information and rates
  4. Perform employee maintenance including adding or removing a covered member

When MIBS has completed the initial scrubbing for a Humana group

 

Once all of the enrollment paperwork is complete and MIBS has determined that the initial paperwork is in good order, it will be sent to Humana for underwriting.  As the underwriter reviews the documentation, the carrier may still request additional information.   Again, the group is not covered until they receive their Welcome Letter.

 

Disclaimer

This blog is current as of July 7, 2017.   However, forms and processes are subject to change per the carrier’s discretion.  Because of the unpredictable possibility of changes, it is extremely important for agents to keep up with all communications:

  1. Carrier newsletters like the News from the Blues
  2. MIBS newsletters
  3. Your customer service representative will have important information in their email signature
  4. Staying in communication with your customer service representative regarding your new      business will allow them to advise you correctly.
  5. The MIBS website, mibsga.com will have the most current forms

MIBS puts in a lot of effort to make sure any changes in forms or processes are provided to our agents.  Please take some time to review these communications for those changes that may impact your business.

MIBS sincerely appreciates our agents and their trust in our service and we look forward to many years of successful collaboration.