Standards and Requirements for Rating of Small Groups Under Accident and Sickness Insurance; Exemptions

  1. Law
  2. Georgia Code
  3. Insurance
  4. Group or Blanket Accident and Sickness Insurance
  5. General Provisions
  6. Standards and Requirements for Rating of Small Groups Under Accident and Sickness Insurance; Exemptions

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  1. As used in this Code section, the term "small group" means a group or subgroup of at least two and no more than 50 employees, members, or enrollees.
  2. Except as otherwise provided in this Code section, the claims experience produced by small groups covered under accident and sickness insurance for each insurer shall be fully pooled for rating purposes. Except to the extent that the claims experience of an individual small group affects the overall experience of the small group pool, the claims experience produced by any individual small group of each insurer shall not be used in any manner for rating purposes or solely as a reason for termination of any individual group.
  3. Each insurer's small group pool shall consist of each insurer's total claims experience produced by all small groups in this state, regardless of the marketing mechanism or distribution system utilized in the sale of the group insurance. The pool shall include the experience generated under any medical expense insurance coverage offered under separate group contracts; contracts issued to trusts, multiple employer trusts, or association groups or trusts; or any other group-type coverage. The experience produced under multiple employer trusts or arrangements through contracts issued in this state or provided by solicitation and sale to Georgia residents through an out-of-state multiple employer trust or arrangement for all the Georgia small groups shall be fully pooled for rating purposes. Multiple employer trusts or arrangements shall include any group or group-type coverage issued to a trust or association or to any other group policyholder where such group or group-type contract provides coverage, primarily or incidentally, for sole proprietors, employers, or both.
  4. Notwithstanding the requirements of subsection (b) of this Code section, age, sex, size, area, industry, occupational and avocational factors, and any other factors deemed relevant by the Commissioner may be considered in the initial and renewal rating of each small group. Durations since issue and tier factors may not be considered. Substandard rating in accordance with recognized underwriting practices may be applied only when the employee, member, enrollee, or dependent enters the small group for the first time but shall not be used for renewal rating purposes. Any substandard rating may only be applied across the entire group such that similarly situated employees are charged the same rate. For the purposes of this Code section, an individual who qualifies as a "newly eligible employee," as defined in paragraph (4) of subsection (a) of Code Section 33-30-15, shall not be specified as entering the small group for the first time. Notwithstanding subsection (b) of this Code section, the total initial or renewal premium calculated for any individual small group may deviate from the pool rate by not more than plus or minus 25 percent based upon individual small group experience factors. The direct premium result of select or substandard underwriting practices shall not be considered a deviation from the pool rate.
  5. This Code section shall not apply to:
    1. Policies issued to an employer in another state which provides coverage for employees of this state employed by such employer policyholder;
    2. Policies issued to true associations, as defined in subsection (b) of Code Section 33-30-1;
    3. A policy negotiated in connection with a collective bargaining agreement; or
    4. Limited benefit insurance policies. For the purposes of this Code section, the term "limited benefit insurance" means accident and sickness insurance designed, advertised, and marketed to supplement major medical insurance. The term "limited benefit insurance" includes accident only, CHAMPUS supplement, dental, disability income, fixed indemnity, long-term care, medicare supplement, specified disease, vision, and any other accident and sickness insurance other than basic hospital expense, basic medical-surgical expense, or major medical insurance.
  6. The Commissioner is authorized to exempt insurers from one or more provisions of this Code section upon satisfactory demonstration that such exemption will not result in rates which are unreasonable, inequitable, or unfair under the circumstances and would not conflict with the requirements of the federal Health Insurance Portability and Accountability Act of 1996, P.L. 104-191.

(Code 1981, §33-30-28, enacted by Ga. L. 1990, p. 1402, § 5; Code 1981, §33-30-12, as redesignated by Ga. L. 1991, p. 94, § 33; Ga. L. 1991, p. 1358, § 2; Ga. L. 1994, p. 858, § 2; Ga. L. 1997, p. 1462, § 7.)

Code Commission notes.

- Pursuant to Code Section 28-9-5, in 1991, a comma was inserted following "avocational factors" in the first sentence of subsection (d).

Editor's notes.

- Former Code Section 33-30-12 (Ga. L. 1985, p. 1039, § 1), relating to group or blanket accident and sickness insurance, was repealed by Ga. L. 1986, p. 688, § 2, effective April 1, 1986.

Ga. L. 1997, p. 1462, § 1, not codified by the General Assembly, provides that that Act, which enacted this Code section, is intended to comply with the requirements of the federal Health Insurance Portability and Accountability Act of 1996, P.L. 104-191, as well as to provide an acceptable alternative mechanism for the availability of individual health insurance coverage as contemplated by that federal Act; and further provides that the Act shall be narrowly construed to achieve such purpose without otherwise limiting the state's legislative or regulatory powers with respect to insurance.

JUDICIAL DECISIONS

Private claims against insurer not subject to administrative exhaustion requirement.

- As the Georgia Commissioner of Insurance had agreed with a small business that its health insurer had violated O.C.G.A. § 33-30-12 by using health status factors to calculate renewal premiums, the business was not aggrieved by an agency decision, and it was not required to pursue administrative remedies before filing its lawsuit against the insurer, alleging multiple claims arising from the insurer's practice under state law; additionally, the business's participation in a settlement with the insurer for such statutory violations did not preclude the action as the Commissioner did not have exclusive or primary jurisdiction over such vested legal disputes. Homes of Ga., Inc. v. Humana Empls. Health Plan of Ga., Inc., 282 Ga. App. 802, 640 S.E.2d 313 (2006).

No ERISA preemption.

- Business that commenced an action based on state law and common law claims against its health insurer, asserting that the insurer had improperly relied on health status factors in determining the renewal premium rate in violation of O.C.G.A. § 33-30-12, was not preempted by the Employee Retirement Security Act of 1974, 29 U.S.C. § 1001 et seq., as amended, as the claims were directed at the business's health insurance contract rather than at the group health insurance plan. Homes of Ga., Inc. v. Humana Empls. Health Plan of Ga., Inc., 282 Ga. App. 802, 640 S.E.2d 313 (2006).

Class action certification not an abuse of discretion.

- In a suit brought by various insureds, alleging that an insurance company and the company's related entities engaged in fraud with regard to allegedly fraudulently representing that the insureds were being provided group medical insurance coverage, the trial court did not abuse the court's discretion by certifying the insureds as a class as the reliance of the insureds was based on a uniform renewal document all received, which satisfied the commonality requirement, and differing defenses that the insureds may have did not defeat certification since common questions of law predominated. The reviewing court was satisfied that the trial court exercised judicial discretion in ruling that the computation of individual damages would not be so complex or fact-specific so as to bar certification. Fortis Ins. Co. v. Kahn, 299 Ga. App. 319, 683 S.E.2d 4 (2009), cert. denied, No. S09C1992, 2010 Ga. LEXIS 48 (Ga. 2010).


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