Chapter Ins 8

Ins 8.54(1) (1) Definition.

Ins 8.54(1)(a) (a) In this section, “medically underwritten policy” means a policy that is issued after the small employer insurer has, for purposes of risk selection, used information about the group’s claim experience or the health history or medical records of one or more persons eligible for coverage.

Ins 8.54(1)(b) (b) Notwithstanding par. (a), a small employer insurer may apply medical underwriting standards to an individual who originally declined and later applies for coverage under a nonmedically underwritten policy without converting that policy to a medically underwritten policy.

Ins 8.54(2) (2) Class of business.

Ins 8.54(2)(a) (a) In this section, each of the following is a separate class of business, regardless of variations in policy forms, marketing methods or duration of coverage among small employers in the class of business:

Ins 8.54(2)(a)1. 1. All small employers with medically underwritten policies.

Ins 8.54(2)(a)2. 2. All small employers with policies that are not medically underwritten.

Ins 8.54(2)(a)3. 3. All small employers whose policies constitute a block of business assumed by the small employer insurer under a specific assumption treaty with an insurer that is not an affiliate.

Ins 8.54(2)(b) (b) No small employer insurer may establish a class of business other than one specified in par. (a).

Ins 8.54(3) (3) Guaranteed renewability. Except as provided in s. 635.07, Stats., a policyholder has the right to renew a policy on the same terms subject to the premium rate restrictions specified in s. Ins 8.52 (3). The subsection does not prohibit a small employer insurer from offering a policyholder renewal with altered benefit design characteristics if the offer is available to all policyholders in the same class of business without regard to claim experience.

Ins 8.54 Note Note: 1995 Wis. Act 289 repealed s. 635.07, Stats. See s. 632.749, Stats.

Ins 8.54(4) (4) Nonrenewal or termination based on participation requirements.

Ins 8.54(4)(a) (a) A small employer insurer that intends to nonrenew a policy or terminate a policy under s. 635.07 (1) (d), Stats., because the number of eligible employees is less than the number required to keep the policy in force shall do all of the following:

Ins 8.54 Note Note: 1995 Wis. Act 289 repealed s. 635.07, Stats. See s. 632.749 (2), Stats.

Ins 8.54(4)(a)1. 1. Notify the small employer of its intent to nonrenew or terminate and the reason for the nonrenewal or termination. The notice shall be given as required under s. 631.36, Stats., for a nonrenewal or at least 20 days before the termination date for a termination.

Ins 8.54(4)(a)2. 2. Offer to continue the small employer’s coverage for not less than 60 days after the nonrenewal or termination date in order to allow the small employer to increase the number of eligible employees to the required number.

Ins 8.54(4)(a)3. 3. Provide the additional coverage, if the small employer accepts the offer under subd. 2. before the nonrenewal or termination date and pays the premium for the additional coverage at the rate in effect at the time the additional coverage is provided.

Ins 8.54(4)(b) (b) A small employer insurer may not nonrenew a policy or terminate a policy under s. 635.07 (1) (d), Stats., if the reason the number of eligible employees is less than the required number is due to an employee’s sickness or injury, approved leave of absence or temporary layoff. The small employer insurer may establish participation requirements and reasonable verification procedures as part of the policy or employer agreement.

Ins 8.54 Note Note: 1995 Wis. Act 289 repealed s. 635.07, Stats. See s. 632.749 (2), Stats.

Ins 8.54(4)(c) (c) A small employer insurer may not take into consideration factors related to an individual small employer’s claim experience in deciding whether to nonrenew a policy or terminate a policy under s. 635.07 (1) (d), Stats.

Ins 8.54 Note Note: 1995 Wis. Act 289 repealed s. 635.07, Stats. See s. 632.749 (3), Stats.

Ins 8.54(4)(d) (d) A small employer insurer that intends to terminate a policy under s. 635.07 (1) (a) to (c) or (e), Stats., shall comply with the notice requirements under s. 631.36 (2) (b) and (c), (4), (6) and (7), Stats.

Ins 8.54 Note Note: 1995 Wis. Act 289 repealed s. 635.07, Stats. See s. 632.749 (2), Stats.

Ins 8.54(5) (5) Nonrenewal of class of business.

Ins 8.54(5)(a) (a) If a small employer insurer ceases to renew policies issued to all small employers in the same class of business under s. 635.07 (2), Stats., the small employer insurer may not establish any new class of business during the 5-year period beginning with the latest expiration date for policies in effect in the class of business that is not renewed.

Ins 8.54 Note Note: 1995 Wis. Act 289 repealed s. 635.07, Stats. See s. 632.749 (3), Stats.

Ins 8.54(5)(b) (b) At least one year before a small employer insurer ceases to renew policies under s. 635.07 (2), Stats., the small employer insurer shall provide the office with all of the following information:

Ins 8.54 Note Note: 1995 Wis. Act 289 repealed s. 635.07, Stats. See s. 632.749 (3), Stats.

Ins 8.54(5)(b)1. 1. The reason for the decision not to renew.

Ins 8.54(5)(b)2. 2. The number of small employers and the total number of eligible employees affected by the decision not to renew.

Ins 8.54(5)(b)3. 3. The number of small employers in other classes of the small employer insurer’s business that are not affected by the decision not to renew.

Ins 8.54(5)(c) (c) The commissioner may order an examination under s. 601.43, Stats., in order to determine the premium rate history and obtain information on the profitability of the nonrenewed class of business.

Ins 8.54(5)(d) (d) At least one year before a small employer insurer ceases to renew policies under s. 635.07 (2), Stats., the small employer insurer shall provide written notice of that intent to all affected small employers and the insurance regulatory agency in each state in which an affected insured individual resides. The notice shall include all of the following:

Ins 8.54 Note Note: 1995 Wis. Act 289 repealed s. 635.07, Stats. See s. 632.749 (3), Stats.

Ins 8.54(5)(d)1. 1. The reason for the decision to terminate coverage for the class of business.

Ins 8.54(5)(d)2. 2. The date on which coverage will terminate.

Ins 8.54(5)(e) (e) In addition to the requirement under par. (d), the small employer insurer shall, at least 60 days but not more than 75 days before the date coverage will terminate, provide each affected small employer with written notice, complying with s. 631.36 (6) and (7), Stats., of the intent not to renew the policy. The notice shall also comply with the notice requirements of ss. 632.79 and 632.897, Stats.

Ins 8.54(6) (6) Conversion of assumed class of business. A small employer insurer that assumes a class of business from another small employer insurer shall, by the 2nd renewal date for each policy or one year from the date of assumption, whichever is later, convert each policy in the assumed class of business to a policy with the same or similar benefit design characteristics in another class of business specified under sub. (2) (a).

Ins 8.54 History History: Cr. Register, October, 1992, No. 442, eff. 11-1-92; am. (4) (a) to (c), Register, November, 1993, No. 455, eff. 2-1-94.

Ins 8.56 Ins 8.56 Certification of compliance; additional information required.

Ins 8.56(1) (1) The annual certification of compliance required under s. 635.13, Stats., shall be submitted in the form prescribed by the office.

Ins 8.56(2) (2) In addition to the annual certification required under sub. (1), the commissioner may require a small employer insurer to furnish additional information including, but not limited to, the following, using the form and method of transmittal prescribed by the commissioner:

Ins 8.56(2)(a) (a) Rate manuals or exhibits of all rating factors used for each class of business.

Ins 8.56(2)(b) (b) Sample data of small employers including premiums charged and rating factors applied for case characteristics and benefit design characteristics.

Ins 8.56(2)(c) (c) An inventory of case characteristics used by the small employer insurer since the last certification date.

Ins 8.56(2)(d) (d) An exhibit showing the difference in new business premium rates between the current certification date and the last certification date.

Ins 8.56(2)(e) (e) A description of how midpoint rates are determined.

Ins 8.56 Note Note: The form required under sub. (1), OCI 26-051, may be obtained from the Office of the Commissioner of Insurance, P. O. Box 7873, Madison, WI 53707-7873.

Ins 8.56 History History: Cr. Register, October, 1992, No. 442, eff. 11-1-92.

Ins 8.59 Ins 8.59 Small employer insurers shall offer an initial enrollment period to all members of small employer groups; riders and discriminatory coverage are prohibited.

Ins 8.59(1) (1) A small employer insurer that offers a policy shall provide an initial enrollment period during which each eligible employee and dependent of an eligible employee is entitled to enroll in coverage under the policy.

Ins 8.59(2) (2) Except as permitted under sub. (3), a small employer insurer shall provide the same policy coverage to each eligible employee, and dependent of an eligible employee of a small employer, who is covered under a policy.

Ins 8.59(3) (3) A small employer insurer may offer, or participate in an offer, to eligible employees of a choice by the eligible employee among 2 or more policies for coverage of the eligible employee and the eligible employee’s dependents, but only if:

Ins 8.59(3)(a) (a) The enrollment period is simultaneous for all the policies;

Ins 8.59(3)(b) (b) The eligible employee may choose any one of the offered policies; and

Ins 8.59(3)(c) (c) All the policies offered provide benefits similar to or exceeding the benefits provided under the basic health benefit plan as determined under s. Ins 8.66 (1).

Ins 8.59 History History: Cr. Register, November, 1993, No. 455, eff. 2-1-94; correction in (4) made under s. 13.93 (2m) (b) 7., Stats., Register October 2002 No. 562; CR 17-015: r. (4) Register December 2017 No. 744, eff. 1-1-18.

Ins 8.60 Ins 8.60 A small employer insurer may accept an employee’s or dependent’s waiver of coverage during an initial enrollment period only under limited conditions.

Ins 8.60(1) (1) A small employer insurer may not issue a policy unless during the initial enrollment period all the eligible employees and dependents of eligible employees elect and are provided coverage under the policy, except a small employer insurer may permit an individual to decline coverage in the initial enrollment period if the small employer insurer determines:

Ins 8.60(1)(b) (b) The individual elected coverage under another policy during an enrollment period permitted under s. Ins 8.59 (3);

Ins 8.60(1)(c) (c) The individual does not have a risk characteristic or other attribute that would be the sole cause for the small employer insurer to make a decision with respect to premiums or eligibility for a policy that is adverse to the small employer;

Ins 8.60(2) (2) A small employer insurer may permit an individual to decline coverage under a policy under sub. (1) only if the insurer complies with ss. Ins 8.64 and 8.65.

Ins 8.60 History History: Cr. Register, November, 1993, No. 455, eff. 2-1-94; correction in (1) (a), (d) and (e) made under s. 13.93 (2m) (b) 7., Stats., Register October 2002 No. 562; CR 17-015: r. (1) (a), (d), (e) Register December 2017 No. 744, eff. 1-1-18.

Ins 8.61 Ins 8.61 Small employer insurers shall offer coverage to new entrants.

Ins 8.61(1) (1) A small employer insurer shall provide under a policy for an enrollment period during which a new entrant is entitled to enroll in coverage under the policy. The small employer insurer shall provide an enrollment period under a policy of at least 30 days after the date the new entrant is notified of the opportunity to enroll. A small employer insurer which offers more than one policy in the initial enrollment period under s. Ins 8.59 (3) shall offer the new entrant the same choice of policies during the new entrant’s enrollment period.

Ins 8.61(3) (3) A small employer insurer’s policy shall not apply, or permit an employer to apply, a probationary period which must be met before a new entrant is eligible for coverage under a small employer policy, or a similar limitation, that is longer than 6 months.

Ins 8.61(4) (4) A small employer insurer may not add coverage restrictions or limitations under a policy because of the risk characteristics of a new entrant.

Ins 8.61(5) (5) A small employer insurer may assess a risk load to the premium rate associated with a new entrant, consistent with the requirements of s. 635.05, Stats., and s. Ins 8.52 (3) (d).

Ins 8.61 History History: Cr. Register, November, 1993, No. 455, eff. 2-1-94; corrections in (2) and (6) made under s. 13.93 (2m) (b) 7., Stats., Register October 2002 No. 562; CR 17-015: r. (2), (6) Register December 2017 No. 744, eff. 1-1-18.

Ins 8.62 Ins 8.62 Small employer insurers shall offer an open enrollment for individuals excluded prior to enactment or application of the small employer health insurance law.

Ins 8.62(1) (1) A small employer insurer shall provide an enrollment period during which underwritten individuals who were excluded or denied coverage prior to the law’s effective date are entitled to enroll in coverage under the policy currently held by the small employer. Notice of the enrollment period shall [be] given as required under sub. (4).

Ins 8.62(2) (2) A small employer insurer may require an individual who requests enrollment under this section to sign a statement indicating that the individual sought coverage under a policy issued to the employer, other than as a late enrollee, and that the coverage was not offered to the individual. If the individual provides the statement it is presumed that the individual is an underwritten individual and entitled to enroll under this section.

Ins 8.62(3) (3) The enrollment period required under this section shall comply with all of the following:

Ins 8.62(3)(a) (a) It shall commence no later than 45 days after December 1, 1993, and shall last for a period of at least 90 days.

Ins 8.62(3)(b) (b) Underwritten individuals who are provided an opportunity to enroll under this section shall be treated as new entrants.

Ins 8.62(3)(c) (c) The terms of coverage offered to an underwritten individual under sub. (1) may exclude coverage for preexisting medical conditions only if the policy currently held by the small employer contains such an exclusion, the exclusion complies with s. 635.17 (1), Stats., and the exclusion period is reduced by the number of days between the date the individual was excluded or denied coverage and the date coverage is provided to the individual under this section.

Ins 8.62 Note Note: 1995 Wis. Act 289 repealed s. 635.17, Stats. See s. 632.746 (1), Stats.

Ins 8.62(4) (4) A small employer insurer shall provide written notice of the right to enroll under this section to each small employer insured under a policy offered by the insurer. The notice shall be mailed at least 30 days before commencement of the enrollment period and shall clearly describe the rights granted under this section and the process for enrollment of the underwritten individuals in the policy. The insurer shall provide the employer with sufficient copies of the notice to distribute to each eligible employee and shall ask the employer to promptly distribute a copy to each eligible employee. The small employer insurer shall make reasonable efforts to obtain from the small employer certification that the notice was promptly distributed to all eligible employees.

Ins 8.62(5) (5) A small employer insurer may assess a risk load to the premium rate associated with an underwritten individual, consistent with the requirements of s. 635.05, Stats., and s. Ins 8.52 (3) (d).

Ins 8.62(6) (6) The requirement under sub. (1) to offer an enrollment period applies regardless of whether the small employer insurer required to make the offer was the insurer of the employer when the individual was originally excluded or denied coverage.

Ins 8.62 History History: Cr. Register, November, 1993, No. 455, eff. 12-1-93.

Ins 8.63 Ins 8.63 Small employer insurers shall offer coverage to late enrollees.

Ins 8.63(1) (1) A small employer insurer shall provide under a policy for an enrollment period during which a late enrollee is entitled to enroll in coverage under the policy. The small employer insurer shall provide an enrollment period of at least 30 days after the date the late enrollee requests coverage and is notified of the opportunity to enroll.

Ins 8.63(2) (2) A small employer insurer may exclude coverage of a late enrollee who elects coverage for no more than 18 months or provide for up to an 18-month preexisting condition exclusion, but if both a period of exclusion from coverage and a preexisting condition exclusion are applied by the small employer insurer under the policy the combined period may not exceed 18 months from the date the individual applies for coverage under the policy. A small employer insurer may require that the late enrollee remain continuously employed by, or remain a dependent of an eligible employee continuously employed by, the small employer for the entire period of exclusion permitted under this subsection. A small employer insurer may not impose a preexisting condition exclusion under s. 635.17 (1), Stats., in addition to an exclusion permitted under this subsection.

Ins 8.63 Note Note: 1995 Wis. Act 289 repealed s. 635.17, Stats. See s. 632.746 (1), Stats.

Ins 8.63(3) (3) A small employer insurer may assess a risk load to the premium rate associated with a late entrant, consistent with the requirements of s. 635.05, Stats., and s. Ins 8.52 (3) (d).

Ins 8.63 History History: Cr. Register, November, 1993, No. 455, eff. 2-1-94.

Ins 8.64 Ins 8.64 Small employer insurers may not participate with a small employer to coerce, or discriminate among, eligible employees or dependents.

Ins 8.64(1) (1) A small employer insurer may not accept a waiver of coverage, if the insurer, or an insurance intermediary for the insurer, reasonably should know that the small employer pressured or unfairly induced the eligible employee or dependent of an eligible employee to decline coverage due to the individual’s risk characteristics.