45 C.F.R. Subpart E—Provisions Applicable to Only Health Insurance Issuers
Title 45 - Public Welfare
(a) Issuance of coverage in the small group market. Subject to paragraphs (c) through (f) of this section, each health insurance issuer that offers health insurance coverage in the small group market in a State must— (1) Offer, to any small employer in the State, all products that are approved for sale in the small group market and that the issuer is actively marketing, and must accept any employer that applies for any of those products; and (2) Accept for enrollment under the coverage every eligible individual (as defined in paragraph (b) of this section) who applies for enrollment during the period in which the individual first becomes eligible to enroll under the terms of the group health plan, or during a special enrollment period, and may not impose any restriction on an eligible individual's being a participant or beneficiary, which is inconsistent with the nondiscrimination provisions of §146.121. (b) Eligible individual defined. For purposes of this section, the term “eligible individual” means an individual who is eligible— (1) To enroll in group health insurance coverage offered to a group health plan maintained by a small employer, in accordance with the terms of the group health plan; (2) For coverage under the rules of the health insurance issuer which are uniformly applicable in the State to small employers in the small group market; and (3) For coverage in accordance with all applicable State laws governing the issuer and the small group market. (c) Special rules for network plans. (1) In the case of a health insurance issuer that offers health insurance coverage in the small group market through a network plan, the issuer may— (i) Limit the employers that may apply for the coverage to those with eligible individuals who live, work, or reside in the service area for the network plan; and (ii) Within the service area of the plan, deny coverage to employers if the issuer has demonstrated to the applicable State authority (if required by the State authority) that— (A) It will not have the capacity to deliver services adequately to enrollees of any additional groups because of its obligations to existing group contract holders and enrollees; and (B) It is applying this paragraph (c)(1) uniformly to all employers without regard to the claims experience of those employers and their employees (and their dependents) or any health status-related factor relating to those employees and dependents. (2) An issuer that denies health insurance coverage to an employer in any service area, in accordance with paragraph (c)(1)(ii) of this section, may not offer coverage in the small group market within the service area to any employer for a period of 180 days after the date the coverage is denied. This paragraph (c)(2) does not limit the issuer's ability to renew coverage already in force or relieve the issuer of the responsibility to renew that coverage. (3) Coverage offered within a service area after the 180-day period specified in paragraph (c)(2) of this section is subject to the requirements of this section. (d) Application of financial capacity limits. (1) A health insurance issuer may deny health insurance coverage in the small group market if the issuer has demonstrated to the applicable State authority (if required by the State authority) that it— (i) Does not have the financial reserves necessary to underwrite additional coverage; and (ii) Is applying this paragraph (d)(1) uniformly to all employers in the small group market in the State consistent with applicable State law and without regard to the claims experience of those employers and their employees (and their dependents) or any health status-related factor relating to those employees and dependents. (2) An issuer that denies group health insurance coverage to any small employer in a State under paragraph (d)(1) of this section may not offer coverage in connection with group health plans in the small group market in the State before the later of the following dates: (i) The 181st day after the date the issuer denies coverage. (ii) The date the issuer demonstrates to the applicable State authority, if required under applicable State law, that the issuer has sufficient financial reserves to underwrite additional coverage. (3) Paragraph (d)(2) of this section does not limit the issuer's ability to renew coverage already in force or relieve the issuer of the responsibility to renew that coverage. (4) Coverage offered after the 180-day period specified in paragraph (d)(2) of this section is subject to the requirements of this section. (5) An applicable State authority may provide for the application of this paragraph (d) on a service-area-specific basis. (e) Exception to requirement for failure to meet certain minimum participation or contribution rules. (1) Paragraph (a) of this section does not preclude a health insurance issuer from establishing employer contribution rules or group participation rules for the offering of health insurance coverage in connection with a group health plan in the small group market, as allowed under applicable State law. (2) For purposes of paragraph (e)(1) of this section— (i) The term “employer contribution rule” means a requirement relating to the minimum level or amount of employer contribution toward the premium for enrollment of participants and beneficiaries; and (ii) The term “group participation rule” means a requirement relating to the minimum number of participants or beneficiaries that must be enrolled in relation to a specified percentage or number of eligible individuals or employees of an employer. (f) Exception for coverage offered only to bona fide association members. Paragraph (a) of this section does not apply to health insurance coverage offered by a health insurance issuer if that coverage is made available in the small group market only through one or more bona fide associations (as defined in 45 CFR 144.103). [62 FR 16958, Apr. 8, 1997; 62 FR 31694, June 10, 1997, as amended at 62 FR 35906, July 2, 1997; 67 FR 48811, July 26, 2002] (a) General rule. Subject to paragraphs (b) through (d) of this section, a health insurance issuer offering health insurance coverage in the small or large group market is required to renew or continue in force the coverage at the option of the plan sponsor. (b) Exceptions. An issuer may nonrenew or discontinue group health insurance coverage offered in the small or large group market based only on one or more of the following: (1) Nonpayment of premiums. The plan sponsor has failed to pay premiums or contributions in accordance with the terms of the health insurance coverage, including any timeliness requirements. (2) Fraud. The plan sponsor has performed an act or practice that constitutes fraud or made an intentional misrepresentation of material fact in connection with the coverage. (3) Violation of participation or contribution rules. The plan sponsor has failed to comply with a material plan provision relating to any employer contribution or group participation rules permitted under §146.150(e) in the case of the small group market or under applicable State law in the case of the large group market. (4) Termination of plan. The issuer is ceasing to offer coverage in the market in accordance with paragraphs (c) and (d) of this section and applicable State law. (5) Enrollees' movement outside service area. For network plans, there is no longer any enrollee under the group health 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 applies the same criteria it would apply in denying enrollment in the plan under §146.150(c). (6) Association membership ceases. For coverage made available in the small or large group market only through one or more bona fide associations, if the employer's membership in the association ceases, but only if the coverage is terminated uniformly without regard to any health status-related factor relating to any covered individual. (c) Discontinuing a particular product. In any case in which an issuer decides to discontinue offering a particular product offered in the small or large group market, that product may be discontinued by the issuer in accordance with applicable State law in the particular market only if— (1) The issuer provides notice in writing to each plan sponsor provided that particular product in that market (and to all participants and beneficiaries covered under such coverage) of the discontinuation at least 90 days before the date the coverage will be discontinued; (2) The issuer offers to each plan sponsor provided that particular product the option, on a guaranteed issue basis, 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 that market; and (3) In exercising the option to discontinue that product and in offering the option of coverage under paragraph (c)(2) of this section, 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 such coverage. (d) Discontinuing all coverage. An issuer may elect to discontinue offering all health insurance coverage in the small or large group market or both markets in a State in accordance with applicable State law only if— (1) The issuer provides notice in writing to the applicable State authority and to each plan sponsor (and all participants and beneficiaries covered under the coverage) of the discontinuation at least 180 days prior to the date the coverage will be discontinued; and (2) All health insurance policies issued or delivered for issuance in the State in the market (or markets) are discontinued and not renewed. (e) Prohibition on market reentry. An issuer who elects to discontinue offering all health insurance coverage in a market (or markets) in a State as described in paragraph (d) of this section may not issue coverage in the market (or markets) and State involved during the 5-year period beginning on the date of discontinuation of the last coverage not renewed. (f) Exception for uniform modification of coverage. Only at the time of coverage renewal may issuers modify the health insurance coverage for a product offered to a group health plan in the— (1) Large group market; and (2) Small group market if, for coverage available in this market (other than only through one or more bona fide associations), the modification is consistent with State law and is effective uniformly among group health plans with that product. (g) Application to coverage offered only through associations. 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 or more associations, the reference to “plan sponsor” is deemed, with respect to coverage provided to an employer member of the association, to include a reference to such employer. [62 FR 16958, Apr. 8, 1997; 62 FR 31670, June 10, 1997, as amended at 62 FR 35906, July 2, 1997] (a) General rule. In connection with the offering of any health insurance coverage to a small employer, a health insurance issuer is required to— (1) Make a reasonable disclosure to the employer, as part of its solicitation and sales materials, of the availability of information described in paragraph (b) of this section; and (2) Upon request of the employer, provide that information to the employer. (b) Information described. Subject to paragraph (d) of this section, information that must be provided under paragraph (a)(2) of this section is information concerning the following: (1) Provisions of coverage relating to the following: (i) The issuer's right to change premium rates and the factors that may affect changes in premium rates. (ii) Renewability of coverage. (iii) Any preexisting condition exclusion, including use of the alternative method of counting creditable coverage. (iv) Any affiliation periods applied by HMOs. (v) The geographic areas served by HMOs. (2) The benefits and premiums available under all health insurance coverage for which the employer is qualified, under applicable State law. See §146.150(b) through (f) for allowable limitations on product availability. (c) Form of information. The information must be described in language that is understandable by the average small employer, with a level of detail that is sufficient to reasonably inform small employers of their rights and obligations under the health insurance coverage. This requirement is satisfied if the issuer provides each of the following with respect to each product offered: (1) An outline of coverage. For purposes of this section, outline of coverage means a description of benefits in summary form. (2) The rate or rating schedule that applies to the product (with and without the preexisting condition exclusion or affiliation period). (3) The minimum employer contribution and group participation rules that apply to any particular type of coverage. (4) In the case of a network plan, a map or listing of counties served. (5) Any other information required by the State. (d) Exception. An issuer is not required to disclose any information that is proprietary and trade secret information under applicable law. [62 FR 16958, Apr. 8, 1997, as amended at 62 FR 35906, July 2, 1997]
Title 45: Public Welfare
PART 146—REQUIREMENTS FOR THE GROUP HEALTH INSURANCE MARKET
Subpart E—Provisions Applicable to Only Health Insurance Issuers
§ 146.150 Guaranteed availability of coverage for employers in the small group market.
§ 146.152 Guaranteed renewability of coverage for employers in the group market.
§ 146.160 Disclosure of information.
