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Small Employer Legislation Changes for 2008

The Oregon Legislature passed House Bill 2002 (HB 2002) effective January 1, 2008, which amends the definition of a small employer. A small employer is now defined as having between 2 to 50 employees with at least two eligible employees (those with a normal work week of 17.5 or more hours).

To determine an employer’s group size, the state has developed the Oregon Standardized Group Profile Form. This form must be used on new and renewing business. SpeedeRates will be updated with this form for quoting new business with effective dates of April 1, 2008 and later. This form has been sent out on existing business renewing with April 1, 2008 and later anniversary dates.

With this change to legislation, the following comes into effect:

In order to qualify as a small employer, the majority of the group’s employees must work in Oregon.
Different benefit designs may be offered to different classes of employees. However, “carve outs” such as management-only plans may only be offered to small employers with a minimum of 26 eligible employees.
The eligibility requirements (eligibility waiting periods, hours worked per week, etc.) must be the same for all employees. The waiting period cannot exceed 90 days.

In addition, HB 2002 has also changed what rating factors can be used to determine rates for new or renewing business. A carrier has the option to use the following rating factors: age of members; employer contribution; member participation; tobacco use; enrollment in wellness programs; and the length of uninterrupted coverage with the incumbent carrier. For groups with 26-50 employees, rates can also be adjusted for claims experience. These rating factors will apply to quotes and renewal rates beginning with April 1, 2008 effective dates.

If you have any questions, please contact your ODS Account Representative.

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