Group health insurance for a start up

I work for a start-up, and I am tasked with finding us health insurance. My boss’s son has a serious & expensive medical condition, and though their family has private coverage right now, the son has something through the state (Medi-Cal, maybe) because NO ONE will cover him. Add to that my boss’s back problem & cholesteral problems, and that I get migraines that have some pretty expensive meds. Everyone is currently insured under different plans (I’m on cobra from my last job).

Am I going to have difficulty finding a group plan? I know we’re “undesirable”, but isn’t the plan issued to the business? We want to get insurance in place before we hire more employees. Can a group plan refuse to cover his son? Can the company be denied group coverage flat out based on the health status of employees?

The business is the one buying the policy but you will have to provide a census of all employees before anyone will quote you. The census will need to show each employee’s name, marital status, DOB, SSN, ZIP, and sometimes what kind of coverage they might choose, if they choose to enroll. (Married people might or might not want Family coverage.) I am not sure to what extent they check, but I would guess do check something; otherwise why would they want the SSNs.

The insurance co. can refuse to initially insure your group based on one person’s health (although I think that’s rare, in my experience). Once the plan is in place, new people can be added without regard to their individual medical history, although at renewal time the insurance company can choose to raise your rates. I’m not sure how far they’d go to actually cancel a policy just because one person had very high medical costs. If the plan is in place, the company can’t refuse to cover your boss’s son assuming the policy provides for dependent coverage; but they can refuse to carry the group or refuse to renew.

If it makes you feel any better, the company where I work is very small and we have one employee with very high historical costs. We found coverage through several difference carriers and have never been in danger at all of being cancelled.

My understanding is that group coverage cannot legally be declined. Some companies get around this by “refusing to quote” (if they know the group is undesirable). They can load the state-filed rates, however (to a max 67%), upon application.

The fewer the employees in a group, the less likely an insurance company will want to insure them. I know one company automatically max loads new groups of 5 employees or less, regardless of how healthy the employees are.

Often, one specific piece of health history (such as your employers son) will cause the entire group to be max loaded.

missbunny is right about needing a census.

Name, Date of Birth, Gender, Spouse Date of Birth, number of children, coverage type (usually either ee only, ee+child(ren), ee+spouse, and family).

Health Insurance sucks, and you’ll find that the entire process will be a royal PIA. Because every state might have some different state-specific laws, there are probably things missing I dont’ know about for your state.

Anyway, good luck!

My boss knows his son is going to yank up everyone’s rates, which is why my insurance will be 100% company paid. We’re mostly worried about being flat-out refused.

My boss private insurance allowed him to exclude the son, so the rest of the family got coverage. Would we be able to do the same here? Would we ever be able to get the son back on when the company was larger?

Here in Cleveland we have the “Council of Smaller Enterprises” (COSE). My small business (3 people) was able to join COSE for $500/year and get health insurance through them.

The rates were GREAT because we were part of a larger group. If we just went to a broker and got set up, we’d have been charged much more.

I Googled “San Francisco” “small business” and there’s a lot of sites, just not sure if any of them are as official or powerful for SF as COSE is for Cleveland.

I would try checking out some of those groups to see if any of them offer “group leverage” insurance plans that you could join to ease the pain of having people with such medical issues on your group.

FWIW i think my partner told me that since we’re part of this larger COSE group, we couldn’t be denied coverage even though his wife has some pretty serious health issues.