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SB125 – Determining Small Group Size with Anthem
Aug 14, 2015
On June 17, 2015, California’s Governor Brown signed SB125 into law which went into effect immediately. SB125, in part, revises the California definition of "small employer" for purposes of determining employer eligibility in the small employer market for plan years commencing on or after January 1, 2016.
Your partners at Anthem Blue Cross have put together a brief FAQ to help you understand impacts of the law that you can in turn share with your clients.
Q. What is SB125?
A. SB125 revises the definition of a small employer, for plan years commencing on or after January 1, 2016 (new and renewing), to be at least one, but no more than 100 employees. This number is reached when counting both full-time and full-time equivalent employees as specified under the Affordable Care Act. The other existing portions of the CA small employer definition remain and must also be used to determine employer eligibility in the small employer market
Note: There may be further guidance from CA regulators regarding the application of the federal full-time and full-time equivalent standard with the remaining portions of the CA small employer definition.
Q. What are full-time and full-time equivalent employees?
A. SB125 is defining full-time and full-time equivalent employees as follows:
- Full-time employee: is, with respect to a calendar month, an employee who is employed an average of at least 30 hours of service per week or 130 hours of service in a calendar month with an employer.
-Full-time Equivalent (FTE) employee: is a combination of employees, each of whom individually is not a full-time employee because they are not employed on average at least 30 hours a week with an employer, but who in combination, are counted as the equivalent of a full-time employee.
FTEs are determined by calculating the aggregate number of hours of service for that calendar month for employees who were not full-time employees (but not more than 120 hours of service for any employee) and dividing that number by 120.
Q. What are some of the impacts to my Anthem Employee Elect 51-99 groups and 51-100 Key Account groups?
A. Groups considered EmployeeElect 51-99 or 51-100 Key Account will see a change in how plans are underwritten. Additionally, all ACA-compliant Small Group plans are required to cover certain benefits, including Essential Health Benefits (pediatric dental, pediatric vision, and preventive and wellness services and chronic disease management to name a few).
Small Groups are also part of a single risk pool and Anthem is required to base rates on each family member's age, the zip code of the employer, and whether the contract covers an individual or family. The mandated benefits and rating restrictions can have an impact on the rates for Small Groups.
Q. What options will Anthem offer impacted groups?
A. Employer groups with 1-100 employees who want to maintain fully-insured group coverage must move to a Small Group ACA-compliant plan upon their renewal in 2016.
Anthem is currently offering groups with 51-100 employees a number of plan options in advance of January 1, 2016.
Q. Who do I go to with my questions and to get help figuring out the best path for my clients?
A. Anthem encourages you to always reach out to a member of your b&p Sales Team. He or she will be able to assist you during this transition time.
For questions, please contact
a member of your b&p Sales Team - 888.722.3373.