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Oregon's Children's Group Plan: A Dependent-Only Option for Small Businesses

Oregon's new Children's Group Plan allows small business owners to provide comprehensive coverage for children of their workers even if they cannot afford to cover their employees. The Children's Group plan was designed by Oregon's Insurance Pool Governing Board (IPGB) at the direction of the 2003 state legislature.[1] Two insurance carriers offer the plan through comprehensive HMO and PPO products, which are marketed through media campaigns, business groups, and insurance agents.[2]

A business may purchase the Children's Group Plan if it has two to 50 employees and has not provided insurance since July 2003. Employers must contribute at least $50 but may contribute up to 100% of the monthly premium. The family pays the remainder, though lower-income workers may qualify for a subsidy through the state's Family Health Insurance Assistance Program. To avoid adverse selection, 75% of eligible families with children in a firm must participate. Children up to age 23 are covered. All eligible children in an enrolling family must join, unless other group health insurance or the Oregon Health Plan already covers them.

The premium rates for the Children's Group Plan are created by a "group census" for each employer. A blended rate is based on the number and ages of the children enrolled in each employer group. Also, each carrier has its own rates and uses different age band groupings to determine the premiums for each employer group. The table below illustrates premium ranges by three age groupings that incorporate both carriers' prices. This is a reflection of the highest rate per category and the lowest rate per category and could reflect either carrier's rates in any of these low/high examples.

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Coverage began March 1, 2005 and IPGB administrator Rocky King expects enrollment to grow over time, adding that he would be "happy if the children's plan gets 5,000 kids after two years." King doesn't view the new plan as a magic bullet that will solve the problem of all uninsured Oregonians, but as an innovative approach to getting more of the most vulnerable covered.

[1] IPGB is a state agency dedicated to helping small businesses obtain health insurance for themselves, their employees, and their employees' dependents. In addition to the Children's Group Plan, IPGB is introducing a low-cost, limited benefits plan available to employees and their spouses.
[2] Dental coverage is not included.

For More Information: Insurance Pool Governing Board Web site, and Alternative Group Plan Manual,
Contact: Program Manager Certified Plans, Insurance Pool Governing Board, [email protected], Telephone: 503-373-1656 ext. 22225

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