Underwriting guidelines for small groups in New Jersey - Clarification

In January we communicated that all new 2-life groups that intended to add a new employee on or shortly before the policy effective date would be subject to specific underwriting criteria. By “new 2-life group” we meant sole proprietors or self-employed individuals who are adding an employee, thereby becoming a 2-life group.

Please note that this criteria does not apply to cases in New Jersey as the state has specific regulations concerning eligibility. An employer who did not previously qualify as a small employer in the prior calendar year may not be issued coverage under the Small Employer Health Benefits Program. Such employers would need to seek coverage under the Individual Health Coverage Program.

As reference, New Jersey regulation 11:21-7.3, states:

4. At the time of application, the determination of whether an employer is a small employer shall be based upon the small employer's completed New Jersey Small Employer Certification form.

i. If an employer qualifies as a small employer in the immediately preceding calendar year, the employer shall be considered a small employer regardless of the status of the employer on the date of application or the effective date of coverage so long as it employs at least two employees on the first day of the plan year.

ii. If an employer did not qualify as a small employer in the immediately preceding calendar year, the employer shall not be considered a small employer, regardless of the status of the employer on the date of application or the proposed effective date of coverage, if any.

iii. In the case of an employer that was not in existence during the preceding calendar year, the determination of whether the employer is a small or large employer shall be based on the average number of eligible employees that it is reasonably expected that the employer will employ on business days in the current calendar year. An employer that was not in existence during the preceding calendar year must have at least two eligible employees when completing the employer certification and on the first day of the plan year to be considered a small employer.

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