New Jersey Small Group underwriting guidelines to change, slice commission policy to end September 1, 2010

Based on recent actions taken by the New Jersey Small Employer Health Benefits Program (“SEH”) Board, we are making two important changes to our New Jersey Small Group underwriting guidelines and broker commission policy that will affect new and existing business, effective September 1, 2010:

• For new policies issued beginning September 1, 2010, we will require 75 percent participation with Aetna. Under this revised requirement, 75 percent of the group must enroll with Aetna. Valid waivers will no longer include employees who are enrolled with other carrier group health coverage sponsored by the same employer. Other group coverage sponsored by the same employer will not count towards satisfying the 75 percent participation requirement.
• For new policies issued beginning September 1, 2010, we will eliminate our current slice commission policy.

These changes complement our efforts to improve and sustain our ability to meet the needs of employers and employees in the New Jersey small employer market.
 
Underwriting policy changes

Background
For a number of years, the SEH Board has interpreted the guarantee issue and participation requirements as requiring carriers to allow small employers to buy more than one policy if the 75 percent participation requirement is met taking into account all policies. However, the SEH Board believes that the law also can be interpreted to allow a carrier to limit the number of policies it issues a small employer.

As part of its continuing oversight responsibilities, the SEH Board recently adopted a new policy regarding the guarantee issue and participation requirements that will take effect on September 1, 2010. Under this new policy, a “primary” carrier (i.e., the carrier that issues to a small employer group that has 75 percent enrollment with that carrier) is required to issue at least one plan to the group.

A “secondary” carrier (i.e., a carrier that does not have 75 percent of the small employer group’s enrollment) may choose whether to issue a plan(s) to the employer. The SEH Board is expected to issue an Advisory Bulletin on June 1, 2010 that provides further guidance regarding these changes.

Aetna’s New Underwriting Guidelines
As communicated previously, existing Aetna plans are being non-renewed, beginning with August 1, 2010 anniversary dates. Employers who wish to retain coverage with us will be required to select a plan from our new 2010 portfolio.  

With the implementation of the SEH Board’s new guarantee issue policy on September 1, 2010, current Aetna customers with anniversary dates beginning on September 1 will be required to have 75 percent participation with Aetna when selecting a plan from our 2010 portfolio if they wish to remain with us.  

As noted above, valid waivers will no longer include employees who are enrolled with other carrier group health coverage sponsored by the same employer. Other group coverage sponsored by the same employer will not count towards satisfying the 75 percent participation requirement.  

The participation requirement applies only to New Jersey small employers with employees who live or work in Connecticut, New York, New Jersey, Pennsylvania, Delaware, Maryland, Virginia and the District of Columbia. Employees outside of these eight states are not included in the calculation.

If a group does not meet the participation requirement, we will not issue a Small Group policy and will return the case to the broker.

Dual and triple option changes
Beginning September 1, 2010, we will:

• Allow dual option offerings to groups of 2-50 eligible employees.
• Allow triple option offerings to groups for 3-50 eligible employees, as long as at least 1 plan is an H S A plan.
• Only set up multiple plans if at least 1 employee enrolls in each plan.
• Not allow the same medical plan to be offered with different Pharmacy options. To offer dual or triple option, the medical plans must be different.
• Not allow calendar year and plan year deductible plans to be offered at the same time to the same group. If multiple H S A plans are offered within a group, they must all be calendar year or plan year plans.

Commission policy changes
We are eliminating our “slice” commission policy, effective September 1, 2010. As a result, beginning September 1, 2010, you may discontinue referring slice business to us for direct issue and processing.

• You will no longer be required to verify participation to determine if a group is “commission eligible.”
• For groups where we removed commission between January 1, 2010 and August 15, 2010, we will reinstate commission on the group’s anniversary date, when it selects a plan from our new 2010 product portfolio.
• We can reinstate your commission early if a group makes an off-cycle plan change to the new portfolio. Remember, New Jersey law imposes certain limits on the frequency of plan changes.