BUSINESS INSURANCE SOLUTIONS 
from Sedona Benefits

Making good decisions about the benefits and compensation program you offer your employees is tougher than ever. Employees today expect more benefit choices. You want to give them what they need. But even with greater choice comes the need for better communication and education. You want to be sure your employees understand their choices and the value of your entire program.

Today’s small business owners must provide financial and insurance solutions for themselves and their employees, as well as ensure future security of their businesses. Sedona Benefits specializes in the design, implementation, communication, and management of employee benefit programs. We work with each client to develop comprehensive packages tailored to meet unique goals and objectives. Our programs help our clients recruit and retain employees as well as foster employee loyalty.

Many types of insurance coverage are available for small groups including health, dental, vision, chiropractic/acupuncture, life, disability, and supplemental.

Researching insurance plans for your business and your employees is a tough job. You want to make sure that you're offering the most competitive and cost effective benefits at the best possible rates. We all depend on a good insurance plan to help us maintain good physical health or to assist our families and us when accidents occur or unexpected medical issues arise.

Sedona Benefits offers a wide variety of products, services and benefit options to suit your group health insurance needs. We're here to assist you every step of the way.

Issues with California Health Insurance Plans

California can be a very difficult environment to in which to start and operate a small business. Regulations, paperwork, and costs/fees can be daunting. There are precious few advantages to doing business in California. One advantage is health insurance!

While access to health insurance in the U.S. is not universal, accessibility to group insurance for employees with medical problems has improved in recent years primarily through the passage of California legislation bill AB1762 in 1993.

AB1762 prohibits refusing employer-based health insurance for small groups because of a person's health history or medical condition, provided the person is otherwise eligible for employee benefits. That's great news for anyone who works for an employer that offers health insurance to its employees. Employees are now able to get insurance, regardless of health status, medications being taken, past hospitalizations, or other factors.

If the business has between two and fifty employees it is, by the definition in AB1762, a Small Group. As such, the insurance company is severely restricted in the rates they may charge. The group's rates may be no more than 10 percent above or 10 percent below standard rates, based on the health of the employees to be insured. Thus, for small groups, all eligible employees must be covered and the group's rates can't be increased more than 10 percent because of the group’s health condition.

Issues with Arizona Insurance Plans

As an Arizona small business owner, you are not required to offer group health insurance to your employees. A small employer is defined by Arizona as an employer who employees at least two but not more than 50 eligible employees on a typical business day during any one calendar year. If you do offer health insurance, both state and federal rules and regulations apply as well as requirements imposed by the individual insurance companies. The employer determines which employees are eligible for health insurance. The insurance companies, in most cases, are required to offer group health insurance on a guaranteed issue basis without regard to the health status of the group.

The rules tell you how to determine who is an eligible employee for health insurance purposes:

• You determinine the number of hours worked per week for an employee to be considered full time and eligible for health insurance. The minimum requirement customarily established by insurance companies is 20 hours per week; therefore you can choose any hourly requirement between 20 and 40 hours.
• You also determine a probationary period or waiting period for newly hired employees.
• You may not exclude from coverage any employee or a spouse or a dependent child of an employee who meets your eligibility requirements.

The health insurance company or health plan may deny enrollment to one or more of your employees and his dependents if they reside outside the plan's service area as long as they deny enrollment uniformly without regard to health factors.

Insurance companies usually require that at least 75% of the eligible employees of a small employer enroll in the group plan and at least 25% of eligible dependents enroll in the plan where the employee is contributing a portion of the premium for coverage. If the employer pays 100% of the premium, then 100% of the eligible employees must enroll. The same rule applies to dependent coverage if the employer pays the full premium. Employees having other verifiable medical coverage on their own or coverage provided by a government program are not normally included in the total number of employees when applying these percentages.

Insurance company rules will also specify the minimum contribution an employer has to make toward an employee's health insurance premium:

• Employers are generally required to contribute at least 50% of the employee's portion of the premium, but are not required to contribute toward that portion of the premium attributed to the employee's dependent coverage.
• You can choose to pay more and even cover all or part of the coverage for an employee's dependents if you wish.
• If you pay 100% of the premium for employees, you are not required to contribute to the cost for covering their dependents on the health plan.
• You may also establish classes of employees and have different contribution levels for each class, so long as you clearly define each class and treat all members of a class in an equal manner.

You will usually be required to certify that you meet the definition of a small employer. You will usually be asked to fill out a health questionnaire for the group. It is also beneficial to encourage your employees to maintain healthy lifestyles as rates are usually based on the health of the employees in a group.

The insurance company usually imposes a 12-month preexisting condition limitation on an employee who does not have prior health coverage and an 18-month period for late enrollees, those employees who did not enroll in the plan when first eligible. Credit toward this exclusion period is granted for prior coverage without more than a 63-day break in coverage, not counting an employer's probationary period. A timely enrolled child, adopted child, or child placed for adoption would not be subject to a preexisting limitation period.

Plan availability varies by the county and, in some cases, the zip code of where your business is located.

Other types of insurance coverage are also available for small groups including dental, vision, chiropractic/acupuncture, life, disability, and supplemental.