T41CH47

Title 41 > T41CH47

Sections (10)

41-4701

TITLE 41 INSURANCE CHAPTER 47 SMALL EMPLOYER HEALTH INSURANCE AVAILABILITY ACT 41-4701. Short title. This chapter shall be known and may be cited as the Small Employer Health Insurance Availability Act. History: [41-4701, added 1993, ch. 176, sec. 1, p. 435.]

41-4702

TITLE 41 INSURANCE CHAPTER 47 SMALL EMPLOYER HEALTH INSURANCE AVAILABILITY ACT 41-4702. Purpose. The purpose and intent of this chapter is to promote the availability of health insurance coverage to small employers regardless of their health status or claims experience, to prevent abusive rating practices, to require disclosure of rating practices to purchasers, to establish rules regarding renewability of coverage, to establish limitations on the use of preexisting condition exclusions, to provide for establishment of a reinsurance program, and to improve the overall fairness and efficiency of the small group health insurance market. This chapter is not intended to provide a comprehensive solution to the problem of affordability of health care or health insurance. History: [41-4702, added 1993, ch. 176, sec. 1, p. 435; am. 2000, ch. 472, sec. 1, p. 1603.]

41-4703

TITLE 41 INSURANCE CHAPTER 47 SMALL EMPLOYER HEALTH INSURANCE AVAILABILITY ACT 41-4703. Definitions. As used in this chapter: (1) Actuarial certification means a written statement by a member of the American academy of actuaries or other individual acceptable to the director that a small employer carrier is in compliance with the provisions of section 41-4706 , Idaho Code, based on the person’s examination and including a review of the appropriate records and the actuarial assumptions and methods used by the small employer carrier in establishing premium rates for applicable health benefit plans. (2) Affiliate or affiliated means any entity or person who directly or indirectly through one (1) or more intermediaries, controls or is controlled by, or is under common control with, a specified entity or person. (3) Agent means a producer as defined in section 41-1003 (8), Idaho Code. (4) Base premium rate means, for each class of business as to a rating period, the lowest premium rate charged or that could have been charged under a rating system for that class of business by the small employer carrier to small employers with similar case characteristics for health benefit plans with the same or similar coverage. (5) Carrier means any entity that provides, or is authorized to provide, health insurance in this state. For the purposes of this chapter, carrier includes an insurance company, a hospital or professional service corporation, a fraternal benefit society, a health maintenance organization, any entity providing health insurance coverage or benefits to residents of this state as certificate holders under a group policy issued or delivered outside of this state, and any other entity providing a plan of health insurance or health benefits subject to state insurance regulation. (6) Case characteristics means demographic or other objective characteristics of a small employer that are considered by the small employer carrier in the determination of premium rates for the small employer, provided that claim experience, health status and duration of coverage shall not be case characteristics for the purposes of this chapter. (7) Class of business means all or a separate grouping of small employers established pursuant to section 41-4705 , Idaho Code. (8) Control shall be defined in the same manner as in section 41-3802 (2), Idaho Code. (9) Dependent in any new or renewing plan means a spouse, an unmarried child under the age of twenty-five (25) years and who receives more than one-half (1/2) of his financial support from the parent, or an unmarried child of any age who is medically certified as disabled and dependent upon the parent. (10) Director means the director of the department of insurance of the state of Idaho. (11) Eligible employee means an employee who works on a full-time basis and has a normal work week of thirty (30) or more hours or, by agreement between the employer and the carrier, an employee who works between twenty (20) and thirty (3

41-4704

TITLE 41 INSURANCE CHAPTER 47 SMALL EMPLOYER HEALTH INSURANCE AVAILABILITY ACT 41-4704. Applicability and scope. With the exception of a health benefit plan subject to regulation under chapter 52, title 41 , Idaho Code, and to the extent permitted by federal law, the provisions of this chapter shall apply to any health benefit plan delivered or issued for delivery in the state of Idaho that provides coverage to the employees of a small employer in this state if any of the following conditions are met: (1) Any portion of the premium or benefits is paid by or on behalf of the small employer; (2) An eligible employee or dependent is reimbursed, whether through wage adjustments or otherwise, by or on behalf of the small employer for any portion of the premium; (3) The health benefit plan is treated by the employer or any of the eligible employees or dependents as part of a plan or program for the purposes of section 162, section 125 or section 106 of the United States internal revenue code. (4) (a) Except as provided in subsection (b) of this section, for the purposes of this chapter, carriers that are affiliated companies or that are eligible to file a consolidated tax return shall be treated as one (1) carrier and any restrictions or limitations imposed in this chapter shall apply as if all health benefit plans delivered or issued for delivery to small employers in this state by such affiliated carriers were issued by one (1) carrier. (b) An affiliated carrier that is a health maintenance organization having a certificate of authority pursuant to the provisions of chapter 39, title 41 , Idaho Code, may be considered to be a separate carrier for the purposes of this chapter. (c) Unless otherwise authorized by the director, a small employer carrier shall not enter into one (1) or more ceding arrangements with respect to health benefit plans delivered or issued for delivery to small employers in this state if such arrangements would result in less than fifty percent (50%) of the insurance obligation or risk for such health benefit plans being retained by the ceding carrier. The provisions of sections 41-510 and 41-511 , Idaho Code, shall apply if a small employer carrier cedes or assumes all of the insurance obligation or risk with respect to one (1) or more health benefit plans delivered or issued for delivery to small employers in this state. History: [41-4704, added 1993, ch. 176, sec. 1, p. 438; am. 1994, ch. 427, sec. 3, p. 1352; am. 1995, ch. 360, sec. 3, p. 1240.]

41-4705

TITLE 41 INSURANCE CHAPTER 47 SMALL EMPLOYER HEALTH INSURANCE AVAILABILITY ACT 41-4705. Establishment of classes of business. (1) A small employer carrier may establish a separate class of business only to reflect substantial differences in expected claims experience or administrative costs related to the following reasons: (a) The small employer carrier uses more than one (1) type of system for the marketing and sale of health benefit plans to small employers; (b) The small employer carrier has acquired a class of business from another small employer carrier; or (c) The small employer carrier provides coverage to one (1) or more association groups that meet the requirements of section 41-2202 , Idaho Code. (2) A small employer carrier may establish up to nine (9) separate classes of business under the provisions of subsection (1) of this section. (3) The director may establish regulations to provide for a period of transition in order for a small employer carrier to come into compliance with the provisions of subsection (2) of this section in the instance of acquisition of an additional class of business from another small employer carrier. (4) The director may approve the establishment of additional classes of business upon application to the director and a finding by the director that such action would enhance the efficiency and fairness of the small employer marketplace. History: [41-4705, added 1993, ch. 176, sec. 1, p. 439.]

41-4706

TITLE 41 INSURANCE CHAPTER 47 SMALL EMPLOYER HEALTH INSURANCE AVAILABILITY ACT 41-4706. Restrictions relating to premium rates. (1) Premium rates for health benefit plans subject to the provisions of this chapter shall be subject to the following provisions: (a) The index rate for a rating period for any class of business shall not exceed the index rate for any other class of business by more than twenty percent (20%). (b) For a class of business, the premium rates charged during a rating period to small employers with similar case characteristics for the same or similar coverage, or the rates that could be charged to such employers under the rating system for that class of business, shall not vary from the index rate by more than fifty percent (50%) of the index rate. (c) The percentage increase in the premium rate charged to a small employer for a new rating period may not exceed the sum of the following: (i) The percentage change in the new business premium rate measured from the first day of the prior rating period to the first day of the new rating period. In the case of a health benefit plan into which the small employer carrier is no longer enrolling new small employers, the small employer carrier shall use the percentage change in the base premium rate, provided that such change does not exceed, on a percentage basis, the change in the new business premium rate for the most similar health benefit plan into which the small employer carrier is actively enrolling new small employers; (ii) Any adjustment, not to exceed fifteen percent (15%) annually and adjusted pro rata for rating periods of less than one (1) year, due to the claim experience, health status or duration of coverage of the employees or dependents of the small employer as determined from the small employer carrier’s rate manual for the class of business; and (iii) Any adjustment due to change in coverage or change in the case characteristics of the small employer as determined from the small employer carrier’s rate manual for the class of business. (d) Adjustments in rates for claim experience, health status and duration of coverage shall not be charged to individual employees or dependents. Any such adjustment shall be applied uniformly to the rates charged for all employees and dependents of the small employer. (e) Premium rates for health benefit plans shall comply with the requirements of this section notwithstanding any assessments paid or payable by small employer carriers pursuant to chapter 55, title 41 , Idaho Code. (f)(i) Small employer carriers shall apply rating factors, including case characteristics, consistently with respect to all small employers in a class of business. Rating factors shall produce premiums for identical groups which differ only by the amounts attributable to plan design and do not reflect differences due to the nature of the groups assumed to select particular health benefit plans; and (ii) A small employer carrier shall treat all health benefi

41-4707

TITLE 41 INSURANCE CHAPTER 47 SMALL EMPLOYER HEALTH INSURANCE AVAILABILITY ACT 41-4707. Renewability of coverage. (1) A health benefit plan subject to the provisions of this chapter shall be renewable with respect to all eligible employees or dependents, at the option of the small employer, except in any of the following cases: (a) Nonpayment of the required premiums; (b) Fraud or intentional misrepresentation of material fact by the small employer; (c) Noncompliance with the carrier’s minimum participation requirements; (d) Noncompliance with the carrier’s employer contribution requirements; (e) In the case of health benefit plans that are made available in the small employer market only through one (1) or more associations as defined in section 41-2202 , Idaho Code, 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 paragraph uniformly without regard to any health status-related factor relating to any covered individual; (f) The small employer no longer meets the requirements of section 41-4703 (22), Idaho Code; (g) The small employer carrier elects, at the time of coverage renewal, to discontinue offering a particular health benefit plan delivered or issued for delivery to small employers in this state. Unless otherwise authorized in advance by the department of insurance, a carrier may discontinue a product only after the product has been in use for at least thirty-six (36) consecutive months, provided the carrier may not discontinue more than fifteen percent (15%) of its total number of employees and dependents in all lines of business regulated by this chapter in a twelve (12) month period. The carrier shall: (i) Provide advance written or electronic notice of its decision under this paragraph to the director; (ii) Provide notice of the discontinuation to all affected employers and employees or dependents at least ninety (90) calendar days prior to the date the particular health benefit plan will be discontinued by the carrier, provided that notice to the director under the provisions of this paragraph shall be provided at least fourteen (14) calendar days prior to the notice to the affected employers; (iii) Offer to each affected employer, on a guaranteed issue basis, the option to purchase all other health benefit plans currently being offered by the carrier to small employers in this state; (iv) In exercising the option to discontinue the health benefit plan and in offering the option to purchase all other health benefit plans under the provisions of this paragraph, act uniformly without regard to: 1. The claims experience of an affected employer; 2. Any health status-related factor relating to any affected employee or dependent; or 3. Any health status-related factor relating to any new employee or dependent who may become eligible for the coverage; and (v) Offer the new products at rates that comply with section 41-4706 (1)(c), Idaho

41-4708

TITLE 41 INSURANCE CHAPTER 47 SMALL EMPLOYER HEALTH INSURANCE AVAILABILITY ACT 41-4708. Availability of coverage — Preexisting conditions — Portability. (1) Every small employer carrier shall, as a condition of offering health benefit plans in this state to small employers, actively offer to small employers all benefit plans, including the small employer basic health benefit plan, the small employer standard health benefit plan, and the small employer catastrophic health benefit plan. (2) (a) A small employer carrier shall file with the director, in a format and manner prescribed by the director, the small employer basic, standard and catastrophic health benefit plans to be used by the carrier. A health benefit plan filed pursuant to the provisions of this paragraph may be used by a small employer carrier beginning thirty (30) days after it is filed unless the director disapproves its use. (b) The director at any time may, after providing notice and an opportunity for a hearing to the small employer carrier, disapprove the continued use by a small employer carrier of a basic, standard or catastrophic health benefit plan on the grounds that the plan does not meet the requirements of this chapter. (3) Health benefit plans covering small employers shall comply with the following provisions: (a) A health benefit plan shall not deny, exclude or limit benefits for a covered individual for covered expenses incurred more than twelve (12) months following the effective date of the individual’s coverage due to a preexisting condition. A health benefit plan shall not define a preexisting condition more restrictively than a condition, whether physical or mental, regardless of the cause of the condition, for which medical advice, diagnosis, care or treatment was recommended or received during the six (6) months immediately preceding the effective date of coverage. (b) Genetic information shall not be considered as a condition described in this subsection in the absence of a diagnosis of the condition related to such information. (c) A health benefit plan shall waive any time period applicable to a preexisting condition exclusion or limitation period with respect to particular services for the period of time an individual was previously covered by qualifying previous coverage that provided benefits with respect to such services, provided that the qualifying previous coverage was continuous to a date not more than sixty-three (63) days prior to the effective date of the new coverage. The period of continuous coverage shall not include any waiting period for the effective date of the new coverage applied by the employer or the carrier. This paragraph does not preclude application of any waiting period applicable to all new enrollees under the health benefit plan. (d) A health benefit plan may exclude coverage for late enrollees for the greater of twelve (12) months or for a twelve (12) month preexisting condition exclusion; provided that if both a period of excl

41-4715

TITLE 41 INSURANCE CHAPTER 47 SMALL EMPLOYER HEALTH INSURANCE AVAILABILITY ACT 41-4715. Administrative procedures. The director shall promulgate rules and regulations in accordance with the provisions of chapter 52, title 67 , Idaho Code, for the implementation and administration of the small employer health coverage reform act. History: [41-4715, added 1993, ch. 176, sec. 1, p. 454.]

41-4716

TITLE 41 INSURANCE CHAPTER 47 SMALL EMPLOYER HEALTH INSURANCE AVAILABILITY ACT 41-4716. Standards to assure fair marketing. (1) Each small employer carrier shall actively market health benefit plan coverage, including the small employer basic, standard and catastrophic health benefit plans, to eligible small employers in the state. (2) (a) Except as provided in subsection (2)(b) of this section, no small employer carrier or agent shall, directly or indirectly, engage in the following activities: (i) Encouraging or directing small employers to refrain from filing an application for coverage with the small employer carrier because of the health status, claims experience, industry, occupation or geographic location of the small employer; (ii) Encouraging or directing small employers to seek coverage from another carrier because of the health status, claims experience, industry, occupation or geographic location of the small employer. (b) The provisions of subsection (2)(a) of this section shall not apply with respect to information provided by a small employer carrier or agent to a small employer regarding the established geographic service area or a restricted network provision of a small employer carrier. (3) (a) Except as provided in subsection (2)(b) of this section, no small employer carrier shall, directly or indirectly, enter into any contract, agreement or arrangement with an agent that provides for or results in the compensation paid to an agent for the sale of a health benefit plan to be varied because of the health status, claims experience, industry, occupation or geographic location of the small employer. (b) The provisions of subsection (a) of this section shall not apply with respect to a compensation arrangement that provides compensation to an agent on the basis of percentage of premium, provided that the percentage shall not vary because of the health status, claims experience, industry, occupation or geographic area of the small employer. (4) A small employer carrier shall provide reasonable compensation, as provided under the plan of operation of the program, to an agent, if any, for the sale of a small employer basic, standard or catastrophic health benefit plan. (5) No small employer carrier may terminate, fail to renew or limit its contract or agreement of representation with an agent for any reason related to the health status, claims experience, occupation or geographic location of the small employers placed by the agent with the small employer carrier. (6) No small employer carrier or agent may induce or otherwise encourage a small employer to separate or otherwise exclude an employee from health coverage or benefits provided in connection with the employee’s employment. (7) Denial by a small employer carrier of an application for coverage from a small employer shall be in writing and shall state the reason or reasons for the denial. (8) The director may establish rules setting forth additional standards to provide for the