Guaranteed Renewability of Coverage for Employers in the Group Market
Checkout our iOS App for a better way to browser and research.
If a health insurance issuer offers health insurance coverage in the small or large group market in connection with a group health plan, the issuer must renew or continue in force the coverage at the option of the plan sponsor of the plan except as provided in this section.
General Exceptions. A health insurance issuer may nonrenew or discontinue health insurance coverage offered in connection with a group health plan in the small or large group market based only on one (1) or more of the following:
The plan sponsor has failed to pay premiums or contributions in accordance with the terms of the health insurance coverage or the issuer has not received timely premium payments;
The plan sponsor has performed an act or practice that constitutes fraud or made an intentional misrepresentation of material fact under the terms of the coverage;
The plan sponsor has failed to comply with a material plan provision relating to employer contribution or group participation rules, as permitted by this part or other applicable insurance law;
The issuer is ceasing to offer coverage in the market in accordance with subsection (c) and other applicable insurance law;
In the case of a health insurance issuer that offers health insurance coverage in the market through a network plan, there is no longer any enrollee in connection with the plan who lives, resides, or works in the service area of the issuer, or in the area for which the issuer is authorized to do business, and in the case of the small group market, the issuer would deny enrollment with respect to the plan under § 56-7-2805(b)(1)(A); and
In the case of health insurance coverage that is made available in the small or large group market only through one (1) or more bona fide associations, the membership of an employer in the association, on the basis of which the coverage is provided, ceases, but only if the coverage is terminated under this subdivision (b)(6) uniformly without regard to any health status-related factor relating to any covered individual.
Requirements for Uniform Termination of Coverage.
In any case in which an issuer decides to discontinue offering a particular type of group health insurance coverage offered in the small or large group market, coverage of the type may be discontinued by the issuer in accordance with state law in the market only if:
The issuer provides notice to each plan sponsor provided coverage of this type in the market, and participants and beneficiaries covered under the coverage, of the discontinuation at least ninety (90) days prior to the date of the discontinuation of the coverage;
The issuer offers to each plan sponsor provided coverage of this type in the market the option to purchase all, or, in the case of the large group market, any, other health insurance coverage currently being offered by the issuer to a group health plan in the market; and
In exercising the option to discontinue coverage of this type and in offering the option of coverage under subdivision (c)(2)(B), the issuer acts uniformly without regard to the claims experience of those sponsors or any health status-related factor relating to any participants or beneficiaries covered or new participants or beneficiaries who may become eligible for the coverage.
In any case in which a health insurance issuer elects to discontinue offering all health insurance coverage in the small group market or the large group market, or both markets, in this state, health insurance coverage may be discontinued by the issuer only in accordance with applicable state law and if:
The issuer provides notice to the commissioner and to each plan sponsor, and participants and beneficiaries covered under the coverage, of the discontinuation at least one hundred eighty (180) days prior to the date of the discontinuation of the coverage; and
All health insurance issued or delivered for issuance in this state in the market or markets is discontinued and coverage under the health insurance coverage in the market or markets is not renewed.
In the case of a discontinuation under subdivision (c)(2)(A) in a market, the issuer may not provide for the issuance of any health insurance coverage in the market and this state during the five-year period beginning on the date of the discontinuation of the last health insurance coverage not so renewed.
Exception for Uniform Modification of Coverage. At the time of coverage renewal, a health insurance issuer may modify the health insurance coverage for a product offered to a group health plan:
In the large group market; or
In the small group market if, for coverage that is available in the market other than only through one (1) or more bona fide associations, the modification is consistent with state law and effective on a uniform basis among group health plans with that product.
Application to Coverage Offered Only through Associations. In applying this section in the case of health insurance coverage that is made available by a health insurance issuer in the small or large group market to employers only through one (1) or more associations, a reference to “plan sponsor” is deemed, with respect to coverage provided to an employer member of the association, to include a reference to the employer.