1. a. Except as provided in section 513B.5, subsection 4, a small employer carrier, as a condition of transacting business in this state with small employers, shall actively offer to small employers at least two health benefit plans. One health benefit plan offered by each small employer carrier shall be a basic health benefit plan and one plan shall be a standard health benefit plan.
b. (1) A small employer carrier shall issue a basic health benefit plan to a small employer that applies for a plan if the small employer is eligible for the plan pursuant to those provisions set forth in section 513B.32, subsection 1, and agrees to make the required premium payments and to satisfy the other reasonable provisions of the health benefit plan not inconsistent with this subchapter.
(2) A small employer carrier shall issue a standard health benefit plan to a small employer that applies for the plan and agrees to make the required premium payments and satisfy the other reasonable provisions of the health benefit plan not inconsistent with this subchapter.
(3) A small employer carrier establishing more than one class of business shall, in each class of business established, maintain and offer at least one basic health benefit plan to a small employer, if the employer is determined to be eligible for the basic health benefit plan pursuant to the provisions set forth in section 513B.32, subsection 1, and at least one standard health benefit plan. A small employer carrier may apply reasonable criteria in determining whether to accept a small employer provided all of the following apply:
(a) The criteria are not intended to discourage or prevent acceptance of small employers applying for a basic or standard health benefit plan.
(b) The criteria are not related to the health status or claims experience of the small employer.
(c) The criteria are applied consistently to all small employers applying for coverage in the class of business.
(d) The small employer carrier provides for the acceptance of all eligible small employers, as defined in section 513B.2, into one or more classes of business.
The provisions of this subparagraph do not apply to a class of business into which the small employer carrier is no longer enrolling new insureds who are small employers.
(4) The provisions of this lettered paragraph shall be effective upon a date as determined by the commissioner following the commissioner's approval of the basic health benefit plan and the standard health benefit plan.
2. a. A small employer carrier shall file with the commissioner, in a form and manner prescribed by the commissioner, the basic health benefit plans and the standard health benefit plans to be used by the carrier. A health benefit plan filed pursuant to this paragraph may be used by a small employer carrier beginning thirty days after it is filed unless the commissioner disapproves its use.
b. The commissioner at any time after providing notice and opportunity for hearing may disapprove the continued use of a basic or standard health benefit plan by a small employer carrier on the grounds that the plan does not meet the requirements of this subchapter.
3. A health benefit plan providing coverage for small employers shall satisfy all of the following:
a. The plan shall not deny, exclude, or limit benefits for a covered individual for losses incurred more than twelve 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 the following:
(1) A condition that would cause an ordinarily prudent person to seek medical advice, diagnosis, care, or treatment during the six months immediately preceding the effective date of coverage.
(2) A condition for which medical advice, diagnosis, care, or treatment was recommended or received during the six months immediately preceding the effective date of coverage.
(3) A pregnancy existing on the effective date of coverage.
b. A small employer carrier shall waive any time period applicable to a preexisting condition exclusion or limitation period with respect to particular services in a health benefit plan for the period of time an individual was previously covered by qualifying previous coverage that provided benefits with respect to such service, provided that the qualifying previous coverage was continuous to a date not more than ninety days prior to the effective date of the new coverage. The period of continuous coverage shall not include any waiting period prior to 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.
c. The plan may exclude coverage for late enrollees for the greater of eighteen months or an eighteen-month preexisting condition period, provided that if both a period of exclusion from coverage and a preexisting condition exclusion are applicable to a late enrollee, the combined period shall not exceed eighteen months from the date the individual enrolls for coverage under the health benefit plan.
d. (1) Except as provided in subparagraph (3), requirements used by a small employer carrier in determining whether to provide coverage to a small employer, including requirements for minimum participation of eligible employees and minimum employer contributions, shall be applied uniformly among all small employers with the same number of eligible employees applying for coverage or receiving coverage from the small employer carrier.
(2) A small employer carrier may vary application of minimum participation requirements and minimum employer contribution requirements only by the size of the small employer group.
(3) Except as provided in this subparagraph, a small employer carrier shall not consider employees or dependents who have qualifying existing coverage in determining whether the applicable percentage of participation is met under the applicable minimum participation requirements. However, with respect to a small employer with ten or fewer eligible employees, a small employer carrier may consider employees or dependents who have coverage under another health benefit plan sponsored by the small employer when applying minimum participation requirements.
(4) A small employer carrier shall not increase any requirement for minimum employee participation or any requirement for minimum employer contribution applicable to a small employer at any time after the small employer has been accepted for coverage. For any plan issued prior to July 1, 1992, a carrier may, upon approval of the commissioner, increase a minimum employee participation requirement or a minimum employer contribution requirement consistent with chapter 509.
e. (1) If a small employer carrier offers coverage to a small employer, the small employer carrier shall offer coverage to all eligible employees of the small employer and the employees' dependents. A small employer carrier shall not offer coverage to only certain individuals in a small employer group or to only part of the group, except as permitted with regard to late enrollees.
(2) A small employer carrier shall not modify a basic or standard health benefit plan with respect to a small employer or any eligible employee or dependent through riders, endorsements, or other means, to restrict or exclude coverage for certain diseases or medical conditions otherwise covered by the health benefit plan.
(3) A small employer carrier may modify a small employer's health benefit plan, other than a basic or standard health benefit plan, provided the modifications apply to all eligible employees and dependents of that small employer.
4. a. A small employer carrier shall not be required to offer coverage or accept applications pursuant to this section where any of the following apply:
(1) To a small employer, where the small employer is not physically located in the carrier's established geographic service area.
(2) To an employee, when the employee does not work or reside within the carrier's established geographic service area.
(3) Within an area where the small employer carrier reasonably anticipates and demonstrates to the satisfaction of the commissioner that it will not have the capacity within the carrier's established geographic service area to deliver service adequately to the members of such groups because of the carrier's obligations to existing group policyholders and enrollees.
b. A small employer carrier not required to offer coverage or accept applications pursuant to paragraph "a", subparagraph (3), shall not offer coverage in the applicable area to new employer groups with more than twenty-five eligible employees or to any small employer groups until the later of one hundred eighty days following such refusal or the date on which the carrier notifies the commissioner that it has regained capacity to deliver services to small employer groups.
5. A small employer carrier shall not be required to offer coverage to small employers pursuant to subsection 1 for any period of time where the commissioner determines that the acceptance of the offers by small employers in accordance with subsection 1 would place the small employer carrier in a financially impaired condition.
92 Acts, ch 1167, § 11; 93 Acts, ch 80, § 7--;9, 20
Referred to in § 513B.12, 513B.14
© 1997 Cornell College and League of Women Voters of Iowa
Last update: Mon Jan 27 16:05:08 CST 1997