Question
What is the name of your state?What is the name of your state? IL
I am currently on COBRA Group Medical coverage from my previous employer until 4/1/06. My employer group plan and COBRA coverage have remained in force for a total or 13 years. Prior to this I had no pre-existing conditions.
I am now self employed and I am considering one of two possible types of coverage:
1) A "group plan" as a "rated individual" through and association. The agent informs me this is a group plan and can convert to a small employer group without putting me up for consideration for any "pre-existing conditions" upon converting.
2) A small employer group plan. In this case I will need to hire another employee in order to qualify. As I understand it I should not be subject to consideration for any "pre-existing conditions", yet all the quotes I have gotten are considering at least one condition for exemption.
My questions:
What is the definition of a "pre-existing condition" in the event I get group coverage with no lapse?
Is option 1 a true group plan if they treat me as a "rated individual" or am I at risk of being subject to a "pre-existing condition" exemption when I switch coverage to a small employer group plan?
Is there some documentation I should require as proof of insurability (so as not to be considered for a "pre-existing condition" exemption and/or overall acceptance into a new plan) to ensure I will be able to switch to a small employer group plan in the future?
Answer
Just a wag, but option #1 sounds like one of those "we are like a group, but not really" plans such as is offered through NASE and other associations. You are probably better off to bypass that situation.
Small group laws vary by state, and I am not familiar with IL. Many states do require 2 or more employees (30 hours, regular W2 payroll) to qualify as a group plan. The starting rate may not be the final rate once the premiums are risk adjusted for pre-ex conditions.
A pre-ex is defined by the contract from your (new) carrier and to an extent what the laws are in IL. It may involve anything for which you have been treated in the prior 6 months to 2 years. Depends on what IL allows.
The documentation you are looking for is a letter of creditable coverage from your current carrier. Beyond that, you need to get more info from the agents you are talking to, and probably find an agent that does not represent an association for the self employed.