Now what? CV-19 vs Group Health Insurance

A bigger fear than paying for COVID-19 testing and treatment is how do small businesses & people being laid off pay premiums for health insurance? @insureblog @MikeBertaut

— Patrick Paule (@patpaule) March 17, 2020

That is, if companies are (temporarily?) shuttered, what happens to their group plans?

And, of course, there’s the question of folks with individual policies, as well, but that’s a bigger can of worms.

As it is, there are a number of issues here, and answers will also depend on whether a given plan is fully or self-insured.

One of my small groups provides vending and games machines to bars, so our Governor’s order closing all of those has left his company shuttered. He called to ask if he laid off all his employees (including himself), could he keep the group plan in place, and even pay the premiums for his employees?

For now, the only carrier that has given me specific, actionable guidance has been Medical Mutual of Ohio, but I’m certain that other carriers will offer the same options. For example:

“Q. My plan is fully insured. If I have to lay off my entire workforce in response to the COVID-19 crisis, can the company continue to cover those employees?

A. If one person remains employed by the company and covered by the plan, e.g. the owner or a management employee, the company can continue to cover laid-off employees as long as premium is paid. Please note that you must offer this coverage on a uniform, non-discriminatory basis. In other words, you may not choose only certain people for whom you continue to pay premium.”

Typically, carriers require a minimum group size (usually at least one or two, sometimes three, employees); this sees to indicate that this requirement may be waived for the nonce. That would certainly make sense.

He also asked me what his options were if he just canceled the group for now, and we discussed some of those (generally about Short Term Medical plans, for now).

I’m going to update this post as more carriers weigh in.