Carrier required to renew coverage at option of plan sponsor; exceptions; discontinuation of form of product of group health insurance; discontinuation of group health insurance through bona fide association.
1. Except as otherwise provided in this section, coverage under a policy of group health insurance must be renewed by the carrier at the option of the plan sponsor, unless:
(a) The plan sponsor has failed to pay premiums or contributions in accordance with the terms of the group health insurance or the carrier has not received timely premium payments;
(b) The plan sponsor has performed an act or a practice that constitutes fraud or has made an intentional misrepresentation of material fact under the terms of the coverage;
(c) The plan sponsor has failed to comply with any material provision of the group health insurance relating to employer contributions and group participation; or
(d) The carrier decides to discontinue offering coverage under group health insurance. If the carrier decides to discontinue offering and renewing such insurance, the carrier shall:
(1) Provide notice of its intention to the Commissioner and the chief regulatory officer for insurance in each state in which the carrier is licensed to transact insurance at least 60 days before the date on which notice of cancellation or nonrenewal is delivered or mailed to the persons covered by the discontinued insurance pursuant to subparagraph (2).
(2) Provide notice of its intention to all persons covered by the discontinued insurance and to the Commissioner and the chief regulatory officer for insurance in each state in which such a person is known to reside. The notice must be made at least 180 days before the discontinuance of any group health plan by the carrier.
(3) Discontinue all health insurance issued or delivered for issuance for persons in this state and not renew coverage under any group health insurance issued to such persons.
2. A carrier may discontinue the issuance and renewal of a form of a product of group health insurance if the Commissioner finds that the form of the product offered by the carrier is obsolete and is being replaced with comparable coverage. A form of a product may be discontinued by the carrier pursuant to this subsection only if:
(a) The carrier notifies the Commissioner and the chief regulatory officer in each state in which it is licensed of its decision pursuant to this subsection to discontinue the issuance and renewal of the form of the product at least 60 days before the individual carrier notifies the persons covered by the discontinued insurance pursuant to paragraph (b).
(b) The carrier notifies each person covered by the discontinued insurance and the Commissioner and the chief regulatory officer in each state in which such a person is known to reside of the decision of the carrier to discontinue offering the form of the product. The notice must be made at least 180 days before the date on which the carrier will discontinue offering the form of the product.
(c) The carrier offers to each person covered by the discontinued insurance the option to purchase any other health benefit plan currently offered by the carrier to large groups in this state.
(d) In exercising the option to discontinue the form of the product and in offering the option to purchase other coverage pursuant to paragraph (c), the carrier acts uniformly without regard to the claim experience of the persons covered by the discontinued insurance or any health status-related factor relating to those persons or beneficiaries covered by the discontinued form of the product or any person or beneficiary who may become eligible for such coverage.
3. A carrier may discontinue the issuance and renewal of any type of group health insurance offered by the carrier in this state that is made available pursuant to this chapter only to a member of a bona fide association if:
(a) The membership of the person in the bona fide association was the basis for the provision of coverage under the group health insurance;
(b) The membership of the person in the bona fide association ceases; and
(c) Coverage is terminated pursuant to this subsection for all such former members uniformly without regard to any health status-related factor relating to the former member.
4. A carrier that elects not to renew group health insurance pursuant to paragraph (d) of subsection 1 shall not write new business pursuant to this chapter for 5 years after the date on which notice is provided to the Commissioner pursuant to subparagraph (2) of paragraph (d) of subsection 1.
5. If the carrier does business in only one established geographic service area of this state, the provisions of this section apply only to the operations of the carrier in that service area.
6. As used in this section, “bona fide association” has the meaning ascribed to it in NRS 689A.485.
Last modified: February 27, 2006