News From Your Insurance Manager

By Erica Potts

An Update …

Important Updates for all State Fund Workers Compensation Plans

Effective March 1, 2022 - New & Renewing policies have the following updates.

Late Payment Fee A Late Payment Fee of $25 will be charged when a policy goes into a Pending Cancellation status due to non-payment

Non-Sufficient Funds Charge A Non-Sufficient Funds Fee of $30 will be charged when a premium payment is returned.

(Implementing late payment fees and non-sufficient funds charges brings MSF into alignment with industry standards to encourage timely payment of premium).

Audit Non-Compliance Charge As a means of encouraging policyholders to cooperate with an audit, Montana State Fund is implementing an Audit Non-Compliance Charge (ANC) equal to 1x the estimated annual premium. The ANC is removed once the insured complies with the audit. Payment of the ANC does not fulfill the obligations for an audit. The ANC will be charged to the policy, in addition to the estimated premium amount and will not be considered premium for the purposes of commissions, dividends etc.

Becoming a Small Group Health Plan

Small employers interested in provided health benefits to their employees may form a Small Group Health Plan any time during the year. These plans are not restricted to an “Open Enrollment Period”. Common questions and answers to becoming a Small Group Health Plan are…

A small group is made up of 2 -50 individuals. The members of the health plan must be made up of employers and employees, at least one non-related employee must be on the plan.

Participation Rule, carriers will require that 70-75% of the eligible employee base signs up on the health plan. A few factors are taken into account for individuals that have coverage elsewhere.

If a group drops below the required number enrolled to be a group, they can finish the year as is, and may need to reevaluate the Participation Rule.

The employer of the group must pay at a minimum 50% of the employee premium. This percentage must be consistent with all employees.

Coverage being offered and premium contributions for employee’s spouses & dependents is optional for employers.

The employer can designate the hours worked to be eligible to join the health plan. Must be 20+ hours per week but no more than 40. Most carriers use a 30-hour work week.

The group leader chooses the length of the Probationary Waiting Period for new hires to join the health plan. This period can range for 0 Days to no more than 60 days from hire date.

All carriers require a copy of the business’s most recent UI-5 Report (or quarterly report) to accompany the new group application.

A binder check equivalent to the first months premium must accompany the new group paperwork.

A portion of the employer contributed premiums should be tax deductible as the business, this is a great question to ask your accountant prior to signing the dotted line for group coverage.

Please feel free to contact me at the MLA office (406-752-3168) or at for any questions!

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