(A) A health group cooperative of small employers may be formed only for the purpose of obtaining insurance. A health group cooperative:
(1) shall contain at least one thousand eligible employees or must have at least ten participating employers;
(2) shall establish requirements for membership. A small employer's participation in a cooperative is voluntary, but an employer electing to participate in a cooperative shall commit to purchasing coverage through the cooperative for five years, unless allowed to terminate because of a financial hardship affecting the employer as determined by rules governing termination adopted by the director. The health group cooperative may not exclude a small employer, which otherwise meets the requirements for membership, on the basis of claim experience or a health status-related factor, as defined in Section 38-71-840, in relation to the employee or a dependent of the employee;
(3) shall hold an open enrollment period at least once a year during which new members may join the health group cooperative;
(4) shall allow eligible employees and their dependents, upon initial enrollment and during subsequent open enrollment periods, to choose among health insurance plans offered through the cooperative. A person covered by a health insurance plan offered through the cooperative, which requires an enrollment period in excess of one year, is eligible to choose among available plans upon the completion of the enrollment period;
(5) shall offer coverage under all plans offered through the cooperative to all eligible employees of member small employers and their dependents. Coverage must be offered to all employees of member small employers and their dependents except as provided in Section 38-71-1370(B);
(6) does not assume any risk or form self-insurance plans among its members unless it complies with the provisions of Chapter 41 of this title;
(7) has the option of using any type of rating arrangement with the health insurance plans and, at its discretion, premiums may be paid to the health insurance plans by the cooperative, by member small employers, or by eligible employees and their dependents. A health insurance plan offered through the health group cooperative that rates:
(a) each member small employer separately is subject to the laws governing small employer health insurance; and
(b) the entire group as a whole shall charge each insured person based on a community rate within the health group cooperative, adjusted for case characteristics as permitted by Section 38-71-940 and plan selection, and is subject to the laws governing group accident and health insurance.
(B)(1) The health group cooperative, before offering any health insurance plan through the cooperative, and annually after that time, shall register with the department and demonstrate continued compliance with the provisions of item (2).
(2) The health group cooperative:
(a) must be organized as a nonprofit corporation and have the rights and duties pursuant to the provisions of Chapter 31, Title 33 (South Carolina Nonprofit Corporations Act). On receipt of a certificate of incorporation from the South Carolina Secretary of State, the cooperative shall file written notification of the receipt of the certificate and a copy of the cooperative's organizational documents with the director. The board of directors shall file annually with the director a statement of all amounts collected and expenses incurred for the preceding year;
(b) or a member of the board of directors, the executive director, an employee, or an agent of a cooperative, is not liable for:
(i) an act performed in good faith in the execution of duties in connection with the cooperative; or
(ii) an independent action of a small employer insurer or a person who provides health care services under a health insurance plan; and
(c) or a member of the board of directors, the executive director, an employee, or an agent is not liable for failure to arrange for coverage of a particular illness, disease, or health condition.
(C) A small employer insurer may not form, or be a member of, a health group cooperative. An insurer may associate with a sponsoring entity, such as a business association, chamber of commerce, or other organization representing employers or serving an analogous function, to assist the sponsoring entity in forming a health group cooperative.
HISTORY: 2008 Act No. 180, Section 1, eff February 19, 2008.