Renewal of health benefit plan; discontinuing issuance and renewal of coverage, plan or form of product of health benefit plan.
1. Except as otherwise provided in subsections 2 and 3, a carrier shall renew a health benefit plan at the option of the small employer who purchased the plan.
2. A carrier may refuse to issue or to renew a health benefit plan if:
(a) The carrier discontinues transacting insurance in this state or in the geographic area of this state where the employer is located;
(b) The employer fails to pay the premiums or contributions required by the terms of the plan;
(c) The employer misrepresents any information regarding the employees covered under the plan or other information regarding eligibility for coverage under the plan;
(d) The plan sponsor has engaged in an act or practice that constitutes fraud to obtain or maintain coverage under the plan;
(e) The employer is not in compliance with the minimum requirements for participation or employer contribution as set forth in the plan; or
(f) The employer fails to comply with any of the provisions of this chapter.
3. A carrier may require a small employer to exclude a particular employee or his dependent from coverage under a health benefit plan as a condition to renewal of the plan if the employee or his dependent commits fraud upon the carrier or misrepresents a material fact which affects his coverage under the plan.
4. A carrier shall discontinue the issuance and renewal of coverage to a small employer if the Commissioner finds that the continuation of the coverage would not be in the best interests of the policyholders or certificate holders of the carrier in this state or would impair the ability of the carrier to meet its contractual obligations. If the Commissioner makes such a finding, the Commissioner shall assist the affected small employers in finding replacement coverage.
5. A carrier may discontinue the issuance and renewal of a form of a product of a health benefit plan offered to small employers pursuant to this chapter if the Commissioner finds that the form of the product offered by the carrier is obsolete and is being replaced with comparable coverage.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 of a health benefit plan may be discontinued by a carrier pursuant to this subsection only if:
(a) The carrier notifies the Commissioner and the chief regulatory officer for insurance 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 carrier notifies the affected small employers pursuant to paragraph (b).
(b) The carrier notifies each affected small employer and the Commissioner and the chief regulatory officer for insurance in each state in which any affected small employer is located or eligible employee resides 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 affected small employer the option to purchase any other health benefit plan currently offered by the carrier to small employers in this state.
(d) In exercising the option to discontinue the particular 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 claims experience of the affected small employers or any health status-related factor relating to any participant or beneficiary covered by the discontinued product or any new participant or beneficiary who may become eligible for such coverage.
6. A carrier may discontinue the issuance and renewal of a health benefit plan offered to a small employer or an eligible employee pursuant to this chapter only through a bona fide association if:
(a) The membership of the small employer or eligible employee in the association was the basis for the provision of coverage;
(b) The membership of the small employer or eligible employee in the association ceases; and
(c) The coverage is terminated pursuant to this subsection uniformly without regard to any health status-related factor relating to the small employer or eligible employee or his dependent.
7. If a 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.
Last modified: February 27, 2006