May 2, 2008
Group Health Case Submissions for a new policy
When submitting your case for health insurance, it is best to submit at least two weeks before the anticipated effective date. Several items will be needed to get your case finalized:
- Group Application from health insurer
- Check for First Month’s Premium
- Application or waiver for anyone working 25+ hours per week on a permanent basis
- Most recent billing statement from current insurer
- Most recent quarterly unemployment wage and tax statement
- Compensation can be whited-out
In addition, your company should provide communication to employees about the transition to a new health insurer. This communication should provide information about:
- A reminder to employees not to use their old health insurer ID after the new health insurer begins
- Details on what services may need to be precertified under the new health insurer
- A reminder that the new health insurer will have a different preferred drug list (PDL) or formulary and that they should check to see if their prescription would be covered under the same level of co-payments as the previous insurer
- Information that conveys employees should ensure their provider is in the network of the new health insurer otherwise they would be subjected to out of network claims
These are among the things that are important that be communicated to your employees. If the employees use their old ID card after the new health insurance policy has started, your company could be held liable for these claims and have some additional administrative charges for the processing of the claims.
We frequently see employer’s receive underwriting decisions from their new health insurer after the effective date. For example, an employer submits their application and the other items detailed above on May 19, 2008 for an anticipated June 1, 2008 effective date. The underwriting decision is released on May 31, 2008. Enrollment of the employee’s application may not take place for a couple of business days which means ID cards may not arrive at employees homes until June 10, 2008. What will happen if an employee has to get a prescription refilled? The employee may be tempted to use their old ID card to get this prescription filled.
Our office would have sent in a termination notification to previous health insurer after we would have learned of the new policy approval; however, it may take a couple of days for the previous health insurer to deactivate the policy. Using our example above, the previous health insurer may have not entered in the termination information until June 2, 2008 or even June 3, 2008. This small window of time would allow an employee to use their old ID card and the group would still be active in the system. Ultimately the group would be terminated but this claim would still exist and the old insurer would demand repayment.
So you can see, termination of an account is not as simple as it may seem. Consult with our office for help with a memo to communicate these changes.