Frequently Asked Questions - Small Market Guide
- Minnesota's Small Employer Health Plan Market
- Frequently Asked Questions & Answers
- Service Areas
- List of Participating Health Plans
- Additional Reference Sources
Minnesota has offered and provided reforms to make the health insurance market more attractive for small employers. While no employer in the state is required to offer health insurance benefits to its employees, a number of conditions exist in the private insurance market that should benefit small employers if they decide to purchase a health benefit plan.
This information guide provides background information on these market reforms and can help small employers make informed decisions about employee health benefits.
Minnesota law provides small employers with some administrative flexibility in offering employee health benefits:
- All health carriers offering coverage to small employers must, at a minimum,
offer two plans - a deductible plan and a copayment plan - in the
small employer market.
- These two plans tend to be relatively lower cost because the benefits required by law to be offered by these plans are less extensive than most comprehensive health benefit plans. Employers may select these lower cost plans or purchase a more comprehensive, but more expensive, health plan.
Another option may be a small employer alternative benefit plan with reduced benefits and different cost-sharing components.
A small employer flexible benefit plan is another option. This type of plan may modify or exclude required benefits except for maternity and other benefits required by federal law.
Qualified small employers also are assured "guaranteed issue" and "guaranteed renewal" for their health plans.
Guaranteed issue means that a health carrier cannot deny coverage to a small employer based on the health status of one of its employees, a family member, or the overall group.
Guaranteed renewal means that once an health benefit plan is sold to a small group, the health carrier must renew that plan regardless of the health or experience of the group.
Q. Who qualifies as a small employer?
A. Any person, firm, corporation, partnership, association or other entity actively engaged in business (including political subdivisions of the state) is considered a small business if:
- It employed an average of 2 but not more than 50 workers on business days during the preceding calendar year
- And it employs at least 2 current employees on the first day of the health plan year.
Q. Do all of the insurance companies and health maintenance organizations (HMOs) operating in Minnesota participate in the small employer market?
A. No. Coverage is marketed, offered, sold, issued, or renewed only by those health carriers that have decided to participate in the small employer health plan market. A list of participating insurance companies and HMOs which have approved policies and rates as of March 2009 is available at http://www.health.state.mn.us/divs/hpsc/mcs/smallplans.htm.
Q. Do the participating health benefit plan carriers have to guarantee small employers coverage and renewal if they request it?
A. Yes. Qualified small employers must be offered health benefit plans if certain criteria are met by the small employer. Health carriers participating in the small employer market must offer coverage to any small employer who requests it if the small employer:
- contributes at least 50 percent toward the cost of coverage for each eligible employee;
- AND at least 75 percent of the eligible employees who have not waived coverage participate in the plan.
This means that a small group can purchase coverage in the private market, even if one or many of its employees have pre-existing conditions.
Q. Can dependents be covered under the small employer group health plan?
A. Yes. Dependents, including spouses and children, can be covered. However, employers do not have to offer or pay for dependent coverage.
Q. Can the health carrier limit coverage for individuals with pre-existing conditions?
A. Yes. A health carrier can impose a preexisting condition limitation of up to 12 months from the date of enrollment. Late entrants may be subject toa preexisting condition exclusion of up to 18 months. A late entrant is an employee or dependent who did not enroll during the initial enrollment period. In addition, there are special circumstances under which an employee or dependent can enroll after the initial enrollment period without being considered a late entrant. These include loss of coverage under another group plan, exhaustion of COBRA coverage, and addition of a new spouse or a new child.
Q. Will premium rates be the same for all small employers?
A. No. Premium rates will vary from employer to employer depending upon the general health status, claims experience and the age of the covered employees as well as the industry and work location of the employer.
Q. Will the premium rates for my company's health benefit plan increase at renewal?
A. They may. While overall rate increases by health benefit plans are limitedby specific rate bands and other standards, rates for plans purchased by your company may increase due to normal medical care inflation and for reasons related to changes in the factors listed in the previous question. As of January 2003 there are stricter limits on premium increases for small employer health benefit plans.
Q.Will the gender of the employees be considered in the setting of the premium rates?
A. No. The law prohibits the use of gender of eligible employees and dependents in determining premium rates.
Q. What kinds of health plans are available to small employers?
A. All participating health carriers are required to offer a deductible plan and a copayment plan. More comprehensive plans may also be available as well as alternative benefit plans with more limited benefits.
For premium rate estimates for your small employer group, you should contact your insurance agent or broker. If you do not have an agent or broker, contact these health carriers. Before choosing a plan, decide what is most important to you. Coverage and costs vary from company to company. Some plans cover only certain doctors or hospitals which may or may not be conveniently located near your employees' workplace or home.
The Minnesota Department of Health certifies and regulates HMOs. Service areas for HMOs change periodically. The Minnesota Department of Health produces maps of the service areas as these changes occur. For more information about HMO service areas, please contact the Minnesota Department of Health, Minnesota Health Information Clearinghouse, at (651) 201-5178 or 1-800-657-3793.
The Minnesota Department of Commerce licenses other health carriers and Blue Cross and Blue Shield of Minnesota. Please contact the Minnesota Department of Commerce at (651) 296-4026 or 1-800-657-3602 for further information on these health carriers.
List of participating plans.
For information about insurance companies or non-profit health service plans:
Minnesota Department of Commerce
85 East Seventh Place
St. Paul, MN 55101
(651) 296-4026 or 1-800-657-3602
For information about tax implications related to the provision of health care coverage for employees:
Internal Revenue Service
Room 385 Federal Building
316 North Robert Street
St. Paul, MN 55101
For more information, contact the Managed Care Systems Section:
By U.S. Mail:
Minnesota Department of Health
Managed Care Systems Section
85 East Seventh Place, P.O. Box 64882
St. Paul, Minnesota 55164-0882
By Telephone: 651-201-5100 or 1-800-657-3916
Fax: (651) 201-5186
For more information, or to file a complaint, contact the MCS at 651-201-5100 or 1 800-657-3916.