509.1  Form of policy.
  No policy of group life, accident or health insurance shall be delivered in this state unless it conforms to one of the following descriptions:
  1.  A policy issued to an employer, or to the trustees of a fund established by an employer, which employer or trustee shall be deemed the policyholder, to insure employees of the employer for the benefit of persons other than the employer, subject to the following requirements:
  a.  The employees eligible for insurance under the policy shall be all of the employees of the employer, or all of any class or classes thereof determined by conditions pertaining to their employment. The policy may provide that the term “employees” shall include the employees of one or more subsidiary corporations, and the employees, individual proprietors, and partners of one or more affiliated corporations, proprietors or partnerships if the business of the employer and of such affiliated corporations, proprietors or partnerships is under common control through stock ownership, contract, or otherwise. The policy may provide that the term “employees” shall include the individual proprietor or partners if the employer is an individual proprietor or a partnership. The policy may provide that the term “employees” shall include retired employees. The policy may also provide that the term “employees” shall include the board of directors if the employer is a corporation.
  b.  The premium for the group policy shall be paid by the policyholder, either from the employer’s funds or funds contributed by the insured employees, or from both. A policy of group accident and health insurance on which part of the premium is to be derived from funds contributed by the insured employees may be placed in force only if at least seventy-five percent of the then eligible employees, excluding any as to whom evidence of individual insurability is not satisfactory to the insurer, elect to make the required contributions. A policy on which no part of the premium is to be derived from funds contributed by the insured employees must insure all eligible employees, or all except any as to whom evidence of individual insurability is not satisfactory to the insurer. As used in this paragraph, “accident and health insurance” does not include disability income insurance.
  c.  The amounts of insurance under the policy must be based upon some plan precluding individual selection either by the employees or by the employer or trustees.
  d.  Group policies may include dependents of the employee, including the spouse.
  e.  The policy shall not exclude from coverage an employee or an employee’s spouse or dependents on the basis of the eligibility of the employee or the employee’s spouse or dependents for medical assistance under chapter 249A.
  2.  a.  A policy issued to any one of the following to be considered the policyholder:
  (1)  An advisory, supervisory, or governing body or bodies of a regularly organized religious denomination to insure its clergy, priests, or ministers of the gospel.
  (2)  A teachers’ association, to insure its members.
  (3)  A lawyers’ association, to insure its members.
  (4)  A volunteer fire company, to insure all of its members.
  (5)  A fraternal society or association, or any subordinate lodge or branch thereof, to insure its members.
  (6)  A common principal of any group of persons similarly engaged between whom there exists a contractual relationship, to insure the members of such group.
  (7)  An association, the members of which are students, teachers, administrators or officials of any elementary or secondary school or of any college, to insure the members thereof. For the purpose of this subparagraph, the students, teachers, administrators or officials of or for any such school or college shall constitute an association.
  b.   The provisions and requirements of subsection 1 shall apply to the policy and the policyholder and insured in the same manner as subsection 1 applies to employers and employees, except that if a policy is issued to a volunteer fire company or an association, the members of which are students, teachers, administrators or officials of any elementary or secondary school or of any college, the requirement for twenty-five members shall not apply, and, if issued to a teachers’ association or lawyers’ association, not less than sixty-five percent of the members thereof may be insured.
  3.  A policy issued to a creditor, who shall be deemed the policyholder, to insure debtors of the creditor, subject to the following requirements:
  a.  The debtors eligible for insurance under the policy shall be all of the debtors of the creditor, or all of any class or classes thereof determined by conditions pertaining to the indebtedness or to the purchase giving rise to the indebtedness. The policy may provide that the term “debtors” shall include the debtors of one or more subsidiary corporations, and the debtors of one or more affiliated corporations, proprietors or partnerships if the business of the policyholder and of such affiliated corporations, proprietors or partnerships is under common control through stock ownership, contract, or otherwise.
  b.  The premium for the policy shall be paid by the policyholder, either from the creditor’s funds, or from charges collected from the insured debtors, or from both. A policy on which part or all of the premium is to be derived from the collection from the insured debtors of identifiable charges not required of uninsured debtors shall not include, in the class or classes of debtors eligible for insurance, debtors under obligations outstanding at its date of issue without evidence of individual insurability unless at least seventy-five percent of the then eligible debtors elect to pay the required charges. A policy on which no part of the premium is to be derived from the collection of such identifiable charges must insure all eligible debtors, or all except any as to whom evidence of individual insurability is not satisfactory to the insurer.
  c.  The policy may be issued only if the group of eligible debtors is then receiving new entrants at the rate of at least one hundred persons yearly, or may reasonably be expected to receive at least one hundred new entrants during the first policy year, and only if the policy reserves to the insurer the right to require evidence of individual insurability if less than seventy-five percent of the new entrants become insured.
  d.  The amount of insurance on the life of a debtor shall not exceed the amount owed by the debtor to the creditor, or the face amount of a totally or partially executed loan or loan commitment creating personal liability and made in good faith for general agricultural or horticultural purposes to a debtor with seasonal income. However, in no event shall the amount of insurance exceed two hundred thousand dollars.
  e.  The insurance shall be payable to the policyholder. Such payment shall reduce or extinguish the unpaid indebtedness of the debtor to the extent of such payment. Provided that in the case of a debtor for agricultural or horticultural purposes of the type described in paragraph “d”, the insurance in excess of indebtedness to the creditor, if any, shall be payable to a named beneficiary, to the estate of the debtor or under the provision of a facility of payment clause.
  4.  A policy issued to a labor union, which shall be deemed the policyholder, to insure members of such union for the benefit of persons other than the union or any of its officials, representatives, or agents, subject to the following requirements:
  a.  The members eligible for insurance under the policy shall be all of the members of the union or all of any class or classes thereof determined by conditions pertaining to their employment, or to membership in the union, or both.
  b.  The premium for the group life policy shall be paid by the policyholder, either wholly from the union’s funds, or partly from such funds and partly from funds contributed by the insured members specifically for their insurance. No policy, except accident and health, may be issued on which the entire premium is to be derived from funds contributed by the insured members specifically for their insurance. A policy on which part of the premium is to be derived from funds contributed by the insured members specifically for their insurance may be placed in force only if at least sixty-five percent of the then eligible members, excluding any as to whom evidence of individual insurability is not satisfactory to the insurer, elect to make the required contributions. A policy on which no part of the premium is to be derived from funds contributed by the insured members specifically for their insurance must insure all eligible members, or all except any as to whom evidence of individual insurability is not satisfactory to the insurer.
  c.  The policy must cover at least ten members at date of issue.
  d.  The amounts of insurance under the policy must be based upon some plan precluding individual selection either by the members or by the union.
  e.  Policies may include dependents of the insured, including the spouse.
  f.  The policy shall not exclude from coverage a member or a member’s spouse or dependents on the basis of the eligibility of the member or the member’s spouse or dependents for medical assistance under chapter 249A.
  5.  A policy issued to the trustees of a fund established by two or more employers in the same industry or by two or more labor unions or by one or more employers and by one or more labor unions which trustees shall be deemed the policyholder, to insure employees of the employers or members of the unions for the benefit of persons other than the employers or the unions, subject to the following requirements:
  a.  The persons eligible for insurance shall be all of the employees of the employers or all of the members of the unions, or all of any class or classes thereof determined by conditions pertaining to their employment, or to membership in the unions, or both. The policy may provide that the term “employees” shall include the individual proprietor or partners if an employer is an individual proprietor or a partnership. The policy may provide that the term “employees” shall include the trustees or their employees, or both, if their duties are principally connected with such trusteeship. The policy may provide that the term “employees” shall include retired employees. The policy may also provide that the term “employees” shall include the board of directors if the employer is a corporation.
  b.  The premium for the policy shall be paid by the trustees wholly from funds established by the employers of the insured persons. The policy must insure all eligible persons, or all except any as to whom evidence of individual insurability is not satisfactory to the insurer, if the funds are contributed wholly by the employer or unions.
  c.  The policy must cover at least one hundred persons at date of issue.
  d.  The amounts of insurance under the policy must be based upon some plan precluding individual selection either by the insured persons or by the policyholder, employers, or unions.
  e.  Policies may include dependents of the insured, including the spouse.
  f.  The policy shall not exclude from coverage an employee or member or an employee’s or member’s spouse or dependents on the basis of the eligibility of the employee or member or employee’s or member’s spouse or dependents for medical assistance under chapter 249A.
  6.  A policy issued to any nonprofit industrial association, which shall be deemed the policyholder, incorporated for a period of at least ten years and organized for purposes other than obtaining insurance, subject to the following requirements:
  a.  If two or more members of the association, or any class or classes of members thereof determined by conditions pertaining to insurance, elect to insure their employees or any class or classes of employees determined by conditions pertaining to employment; and
  b.  The total number of insured employees must not be less than one thousand, and of these not less than seventy-five percent must be employees of members with at least twenty insured employees each, and further, not more than ten percent may be employees of members with less than ten insured employees each; and
  c.  The insurance premiums are paid by such members to the association; each member, insofar as applicable to the member’s own employees, may collect part of the premium from insured employees, and the method of apportionment of the premium payment between the member and the member’s employees may be varied as among individual members; and
  d.  Not less than seventy-five percent of the eligible employees of each participating member may be insured where the employees pay a part of the premium. The word “employees” as used in this subsection shall also include the individual members and employees of such association.
  e.  Policies may include dependents of the employees, including the spouse.
  f.  The policy shall not exclude from coverage an employee or an employee’s spouse or dependents on the basis of the eligibility of the employee or the employee’s spouse or dependents for medical assistance under chapter 249A. This paragraph shall also apply to corporations operating within the state who provide insurance coverage for their employees directly, and the commissioner shall have the authority to enforce the provisions of this paragraph.
  7.  A policy issued to the department of human services, which shall be deemed the policyholder, to insure eligible persons for medical assistance, or for both mandatory medical assistance and optional medical assistance, as defined by chapter 249A as hereafter amended.
  8.  A policy of group health insurance coverage, as defined in section 513B.2, issued by a small employer carrier, as defined in section 513B.2, to a bona fide association, subject to the following requirements:
  a.  The policy provides group health insurance coverage to eligible employees of members of a bona fide association that are small employers as defined in section 513B.2, and to the spouses and dependents of such employees.
  b.  The policy is issued to a bona fide association. For the purposes of this subsection, a bona fide association is an association which meets all of the following requirements:
  (1)  The association is a trade, industry, or professional association which is organized in good faith as a nonprofit corporation under chapter 504 for purposes other than obtaining insurance and has been in existence and actively maintained for at least five continuous years at the time the policy is issued.
  (2)  The association does not condition membership in the association on the health status of employees of its members or the health status of the spouses and dependents of such employees.
  (3)  Group health insurance coverage offered by the association is available to all eligible employees of its members that are small employers as defined in section 513B.2 who choose to participate in the health insurance coverage offered, and to the spouses and dependents of such employees, regardless of the health status of such employees or their spouses and dependents.
  (4)  Group health insurance coverage offered by the association is available only to persons who are eligible employees of a small employer as defined in section 513B.2 that is a member of the association, or to the spouses or dependents of such employees.
  9.  A policy of group health insurance coverage issued to an associated health plan pursuant to section 513D.1 that is subject to regulation by the commissioner.
  10.  A policy issued to a resident of this state under a group life, accident, or health insurance policy issued to a group other than one described in subsections 1 through 9, subject to the following requirements:
  a.  The commissioner determines that all of the following apply:
  (1)  The issuance of the group policy is not contrary to the best interest of the public.
  (2)  The issuance of the group policy will result in economies of acquisition or administration.
  (3)  The benefits under the group policy are reasonable in relation to the premium charged.
  b.  The commissioner need not make a determination under paragraph “a” if the commissioner determines that the group insurance coverage offered in this state by an insurer or other person is offered under a policy issued in another state and that state or another state in which the policy is offered, having requirements substantially similar to those in paragraph “a”, has determined that the policy meets those requirements.
  c.  The premium for the policy shall be paid either from the policyholder’s funds, or from funds contributed by the covered person, or both.
  d.  The insurer may exclude or limit the coverage on any person as to whom evidence of individual insurability is not satisfactory to the insurer.
  e.  If compensation of any kind will or may be paid to the policyholder in connection with the group policy, the insurer shall provide to the prospective insured written notice that compensation will or may be paid. Notice shall be provided whether the compensation is direct or indirect, and whether the compensation is paid to or retained by the policyholder, or paid to or retained by a third party at the direction of the policyholder or any entity affiliated with the policyholder by ownership, contract, or employment. The notice shall be placed on or accompany any document designed for the enrollment of prospective insureds.
[C24, 27, 31, §8675, 8676; C35, §8684-e1 – 8684-e3; C39, §8684.01 – 8684.03; C46, §509.1 – 509.3; C50, 54, 58, 62, 66, 71, 73, 75, 77, 79, 81, §509.1]
83 Acts, ch 96, §157, 159; 85 Acts, ch 69, §1; 87 Acts, ch 63, §1; 91 Acts, ch 244, §25; 92 Acts, ch 1162, §11; 2006 Acts, ch 1117, §33; 2007 Acts, ch 57, §1, 2, 8; 2012 Acts, ch 1023, §108; 2013 Acts, ch 138, §75; 2017 Acts, ch 29, §145; 2018 Acts, ch 1063, §3, 4
Referred to in §513B.2