September 10, 2020
One of the less talked-about aspects of COVID-19 and its effect on commerce, is the profound impact it is having on businesses who are in the process of group health plan renewals. We’ve all heard about the layoffs, the furloughs, and the temporary closures, though there seems to be limited discussion on how these actions directly, and indirectly, impact businesses that provide health insurance benefits to their employees.
This is a complex issue and we’ll only by covering a few of the more common scenarios, here. Hopefully, it will shed some much-needed light on what business owners and HR executives need to consider as they go about the process of renewing their 2021 group health plan.
While there are obviously many stories out there, three areas really seem to stand out, as they reflect some of the most commonly faced challenges. They include companies who’ve had to lay off significant percentages of their staff, those who’ve been forced to reduce hours across-the-board to part-time status, and businesses that, sadly, had no option but close their doors for good.
Companies Facing Substantial Layoffs
Maintaining full staff is simply not an option for many businesses and, unfortunately, it has resulted in countless full-time workers being let go. Depending on the severity of the layoffs, it can shift the company into an entirely new rating category. When this happens, it ultimately affects everything from the enrollment process and monthly premiums, to compliance requirements, HR documentation and various other aspects of managing the group’s plan.
A good example of this would be a company that saw their full-time staff numbers drop below 50 in the wake of the pandemic, as they would now fall under new community rating guidelines. This is a system that evaluates businesses based on a wide range of criteria to determine premiums, plan options, network participation, and many other factors.
Businesses Forced to Reduce Full-time Employees Hours
Rather than layoff large portions of their workforce, many companies made the decision to convert their full-time employees to part-time status, as a way of keeping everyone employed by any means available. And while noble, this too can have a profound impact on the company’s group coverage options. If the entire staff, excluding the owner, drop from 40 hours per week to under 30, not a single staff member would be eligible for enrollment in the group plan.
For starters, part-time employees can’t enroll for group health benefits. More importantly, with only one full-time staff member remaining, there would be no group to enroll in. This can leave the entire staff uninsured during what is arguably the worst time imaginable, while forcing both staff and business owners to pay considerably higher premiums for their own individual or family coverage.
Companies That Permanently Closed
In the most extreme cases of COVID-related economic hardship, are the businesses who had no option but to close their operation for good. This obviously dissolves the group plan, leaving all who were previously enrolled left without health insurance in the middle of a global health pandemic, and months away from the start of Open Enrollment. In cases like these, it’s possible to purchase individual or family coverage under the Special Enrollment clause, which makes exceptions for those who’ve moved, changed jobs, gotten married, and more.
Additionally, several major carriers offer temporary medical plans, dental, vision and a variety of other coverage options. If you’re not sure where to start, contacting a local health insurance agency who specializes in group health will ensure that you’re on the right track.
Free, Expert Advice on Renewing Your 2021 Group Health Plan
In the spirit of complete honesty, this is not a pleasant article to write. We know that many of those reading it are, right now, dealing with unfathomable levels of stress and concern for their loved ones. If you’re in Illinois and lost group coverage as a result of the COVID outbreak, Premier Financial Insurance can help. We’re a small yet very well-established health insurance agency in Lisle, and have been serving Illinois businesses, individuals and families since 2003.
Contact Premier for more information on your full range of options, or schedule an appointment with one of our licensed agents online, over the phone, or at our Lisle IL health insurance office. There are no fees for our services, and never any pressure to purchase coverage through us.
We can be reached by phone at 800-369-0287 or via email through our contact page.