2012 Small group (2-50 eligible employees) participation & business rules

Small business groups must meet these requirements to offer a Priority Health benefits plan. Include proof of the requirements in each group's application packet. If a group is found ineligible or if a packet is incomplete, coverage will be denied or delayed.

Minimum participation rules

For new small groups and existing groups that made plan changes effective January 1, 2012 or later.

Overall participation requirement

• 2–10 eligible employees: 100% of eligible employees seeking coverage must participate
• 11–25 eligible employees: 75% of eligible employees seeking coverage must participate
• 26-50 eligible employees: 50% of eligible employees seeking coverage must participate

Participation requirements for groups offering multiple Priority Health plans

• Groups with 2-10 eligible employees enrolling with Priority Health may offer 1 plan design.
• Groups with 11-50 eligible employees enrolling with Priority Health may offer 2 plan designs.
  • When multiple plans are offered, the overall participation requirements apply to each plan. Priority Health may elect to waive this rule for groups of 11-50 eligible employees if the 2 Priority Health plans together enroll 100% of employees seeking coverage (for example, 40% enroll in Plan A and 60% enroll in Plan B).
  • There must be a minimum of 5 enrolled contracts in each plan including an HSA, if offered.
  • A HealthbyChoice^SM plan may only be paired with another HealthbyChoice plan.
  • Existing groups may maintain their current plan offerings and participation requirements if no benefit changes are made. If any plan changed in any way or if a plan is added, groups are required to change to the new plan options available on their renewal date.

Participation of active employees

• Up to 20% of subscribers may be retired. Retiree/early retiree coverage is not available to new groups.
• Sponsored dependent coverage is not available to new groups, but eligible dependents may qualify for MyPriority^SM individual and family plans. Existing groups with sponsored dependents currently enrolled may continue to enroll additional eligible sponsored dependents.
• Up to 20% of subscribers may be covered as surviving spouses. Surviving spouse coverage is not available to new groups, but subscribers may qualify for MyPriority individual and family plans or individual Medicare Advantage plans. Groups with surviving spouses currently enrolled may enroll additional surviving spouses.

Participation of employees outside the service area/Michigan

• HMO: 100% of employees must live or work in the service area.
• POS: 90% of enrolled employees must live in the service area.
• PPO: 70% enrolled employees must live in Michigan.

Participation rules applied to segments

If Priority Health is offered to a segment of employees (such as those who live in the service area or management or administrative employees), participation rules for the segment covered by the Priority Health plan will apply as if that segment is the entire group. Example: A group of 45 employees has 30 who live outside the service area and are not covered by Priority Health. The participation rules for a group of 15 employees will apply to this group.

If the entire group has more than 50 employees, the group will be considered a large group and is not subject to these small group participation rules.

Other requirements for small groups

• Group must be of a permanent nature and financially stable.
• Group must have been formed for a purpose other than to secure group insurance.
• Group must meet the definitions of "small employer" and "eligible employee" as defined in Chapter 37 of the Michigan Insurance Code:
  

  "Small Employer means any person, firm, corporation, partnership, limited liability company, or association actively engaged in business who, on at least 50% of its working days during the preceding and current calendar years, employed at least 2 but not more than 50 eligible employees. In determining the number of eligible employees, companies that are affiliated companies or that are eligible to file a combined tax return for state taxation purposed should be considered 1 employer."

• Seasonal employees (those working less than 36 weeks per year) and 1099 contractors are not eligible.
• Directors, corporate officers, trustees, corporate lawyers, elected officials and owners or partners are not eligible unless they are full-time employees.
• The group must carry Worker's Compensation coverage unless not required by law.
• Priority Health will not co-exist with an employer-sponsored individual plan if doing so violates Priority Health participation rules.
• The group's extension of coverage policy for lay-off or disability may not exceed 90 days. If a group has no written policy for laid-off employees, the group's standard termination rule (date of termination or end of month) applies. If a group has no written policy for employees on a disability leave, the term of coverage shall not exceed 90 days from the date of disability.
• Employer contribution requirements: The employer must contribute at least 50% of the single rate or at least 40% of the single, double and family rate. This requirement includes early retirees, retirees and surviving spouses, if applicable.

Business proof requirements - groups with 2 employees

Groups with 2 eligible employees must provide proof that their business exists. Use this chart to find out what is required for different types of business.

Business type	Required information
Sole proprietor	Copy of Schedule C and Copy of Federal Tax ID and IRS verification form or certification (such as a "doing business as" (DBA) certificate with a county clerk stamp)
Partnership	Copy of Schedule 1065 including Schedule K1 and  Copy of Federal Tax ID and IRS verification form or partnership papers
Corporation	Copy of Schedule 1120 (Sub S - Schedule 1120s) including Schedule K1 and  Copy of any federal document with Federal Tax ID or articles of incorporation
Farmer	Copy of Schedule F
Limited liability corporation (LLC)	Copy of Schedule 1065 including Schedule K1 and Copy of articles of organization
Non-profit corporation	Sole proprietor - Schedule C and state license or certification Non-sole proprietor - Copy of Federal Tax ID and IRS verification form, state license or certification and copy of applicable tax filing for the entity