Tuesday, September 14, 2010

How -- and why -- to become a "group of one"

In a couple of weeks, changes to Washington state law will make it easier for sole proprietors and some self-employed individuals to get affordable health insurance coverage.

The change involves small group coverage, which under state law in recent years has meant entities (such as small businesses) of 2 to 50 employees. They could qualify for health coverage in the small group market, which doesn't require a health screening.

One-person businesses, however, have had to seek coverage in the individual insurance market, where health screening is the norm and coverage can be hard to find (and expensive) for folks with pre-existing medical conditions.

By Oct. 1, 2010, however, state law will consider 1 person a "group" for insurance purposes. This means that sole proprietors, for example, will be able to qualify for the group coverage.

There are some provisions to ensure that the business is bona fide, however. In general, the law requires people to show that:

-they've been employed by (or run) the same business for at least the last 12 months,
-they've made at least 75 percent of their income (or 51 percent for agricultural businesses) from the business or trade.

The bill changing the law was Senate Bill 6538, prime-sponsored by Sen. Karen Keiser and co-sponsored by Sen. Cheryl Pflug. Similar changes to federal law have been approved by Congress and signed by the president -- they're included in the federal health reform legislation passed this spring -- but don't take effect until 2014.

To find out more, talk to your insurance agent or broker, or call us -- the Washington state insurance commissioner's office -- at 1-800-562-6900.

Note: This post was corrected to indicate that the federal changes don't take effect until 2014.

WA court ruling says that insurance value of property includes sales tax

Jason Anderson, a Seattle lawyer and longtime author of the Washington State Insurance Law Blog, has put up a post re: a recent Washington State Supreme Court ruling that "actual cash value" of insured property includes sales tax, even if the policyholder hasn't yet purchased replacement property.

The case involves a woman named Laura Holden, who had rental insurance when a fire struck the home she was renting. She had coverage with Farmers, including an extra endorsement for replacement cost coverage. The insurer didn't want to pay sales tax until after Holden had purchased replacement items; she said she couldn't afford to pay first and then wait for reimbursement. Click here for Anderson's blog post summarizing the case and the court's ruling, which reversed a lower court's decision.

While we're at it, we might as well mention that there's at least one other longtime regional insurance law blog, the Northwest Insurance Law Blog, written by lawyers in Seattle and Portland. Both summarize recent rulings in insurance law. (And our usual disclaimer applies: mentioning an entity on this blog ≠ endorsement. But you knew that.)

Small business fair coming up in Renton

More than 30 federal, state and local government agencies -- including us -- and business and trade associations are hosting a Washington Small Business Fair in Renton on Sept. 25.

Here's the slogan, which sums it up nicely: "One day, one place - learn what you need to run a small business."

Our folks will be there with specifics on business insurance, and can answer questions about a wide variety of other insurance topics as well.

The event is free, parking is free, and no advance registration is required. It's from 8 a.m. to 3:30 p.m. at Renton Technical College, 3000 NE 4th Street, in Renton. The fair offers dozens of seminars, covering things like how to start a startup, legal and tax issues, marketing and PR, government contracts, etc.

Here's the event's website, and here's its Facebook page.