In California, Small Business is guaranteed issue. This means that regardless of the health history of your employees, the insurance companies can't deny your application. They may ask a few health related questions, but this is only for rating purposes. All insurance companies have standard published premiums for small groups. Depending on several factors, including health history, these premiums can be adjusted up or down by a maimum of 10%. Most insurance companies will automatically rate up a 2 person group by 10%, so the health history is irrelevant. The insurance company will not require medical records and will base their rating off how you answer the questions. However, we caution you to be honest on the application. To do otherwise would be considered fraud and may result in the termination of your coverage if discovered. It is certainly not worth the risk for a possible 10% reduction of premium. - Friday, December 18, 2009 @ 11:45 am