Chapter 635

635.18 635.18 Fair marketing standards.

635.18(1) (1) Every small employer insurer shall actively market health benefit plan coverage to small employers in the state.

635.18(2) (2) 

635.18(2)(a) (a) Except as provided in par. (b), a small employer insurer or an intermediary may not, directly or indirectly, do any of the following:

635.18(2)(a)1. 1. Discourage a small employer from applying, or direct a small employer not to apply, for coverage with the small employer insurer because of the health status, claims experience, industry, occupation or geographic location of the small employer.

635.18(2)(a)2. 2. Encourage or direct a small employer to seek coverage from another insurer because of the health status, claims experience, industry, occupation or geographic location of the small employer.

635.18(2)(b) (b) Paragraph (a) does not prohibit a small employer insurer or an intermediary from providing a small employer with information about an established geographic service area or a restricted network provision of the small employer insurer.

635.18(3) (3) 

635.18(3)(a) (a) Except as provided in par. (b), a small employer insurer may not, directly or indirectly, enter into any contract, agreement or arrangement with an intermediary that provides for or results in compensation to an intermediary for the sale of a health benefit plan that varies according to the health status, claims experience, industry, occupation or geographic location of the small employer or eligible employees or dependents.

635.18(3)(b) (b) Payment of compensation on the basis of percentage of premium is not a violation of par. (a) if the percentage does not vary based on the health status, claims experience, industry, occupation or geographic area of the small employer or eligible employees or dependents.

635.18(4) (4) A small employer insurer may not terminate, fail to renew or limit its contract or agreement of representation with an intermediary for any reason related to the health status, claims experience, occupation or geographic location of the small employers or eligible employees or their dependents placed by the intermediary with the small employer insurer.

635.18(5) (5) A small employer insurer or an intermediary may not 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.

635.18(6) (6) Denial by a small employer insurer of an application for coverage from a small employer shall be in writing and shall state the reason or reasons for the denial.

635.18(7) (7) A 3rd-party administrator that enters into a contract, agreement or other arrangement with a small employer insurer to provide administrative, marketing or other services related to the offering of health benefit plans to small employers in this state is subject to this chapter as if it were a small employer insurer.

635.18(8) (8) The commissioner may by rule establish additional standards to provide for the fair marketing and broad availability of health benefit plans to small employers in this state.

635.18 History History: 1991 a. 250, 315; 1997 a. 27.

635.19 635.19 Issuance of coverage in small group market.

635.19(1) (1) 

635.19(1)(a) (a) Except as provided in subs. (2) to (6), a small employer insurer that offers a group health benefit plan in the small group market shall do all of the following:

635.19(1)(a)1. 1. Accept any small employer in the state that applies for such coverage.

635.19(1)(a)2. 2. Accept for enrollment under such coverage any eligible individual who applies for enrollment during the period in which the individual first becomes eligible to enroll under the terms of the group health benefit plan.

635.19(1)(a)3. 3. Place no restriction on an eligible individual under par. (b) that is inconsistent with s. 632.746 or 632.748.

635.19(1)(b) (b) For purposes of this section, whether an individual is an “eligible individual” in relation to a small employer shall be determined in accordance with all of the following:

635.19(1)(b)1. 1. The terms of the group health benefit plan under which the individual is applying for enrollment.

635.19(1)(b)2. 2. Rules of the small employer insurer offering the group health benefit plan under which the individual is applying for enrollment, which rules must apply uniformly in this state to small employers in the small group market.

635.19(1)(b)3. 3. All state laws that apply to small employer insurers and the small group market.

635.19(2) (2) 

635.19(2)(a) (a) A small employer insurer that offers a group health benefit plan in the small group market through a network plan may do any of the following:

635.19(2)(a)1. 1. Limit the small employers that may apply for such coverage to those with eligible individuals who reside, live or work in the service area of the network plan.

635.19(2)(a)2. 2. Within the service area of the network plan, deny such coverage to small employers if the small employer insurer demonstrates to the commissioner all of the following:

635.19(2)(a)2.a. a. That the insurer does 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.

635.19(2)(a)2.b. b. That the insurer is applying this subdivision uniformly to all small employers without regard to the claims experience of those small employers or their employees or employees’ dependents or any other health status-related factor of those employees or their dependents.

635.19(2)(b) (b) A small employer insurer that denies coverage under par. (a) 2. in any service area may not offer coverage in the small group market in that service area for 180 days after the date on which the coverage was denied.

635.19(3) (3) 

635.19(3)(a) (a) A small employer insurer that offers a group health benefit plan in the small group market may deny small employers coverage under such a plan in the small group market if the small employer insurer demonstrates to the commissioner all of the following:

635.19(3)(a)1. 1. That the insurer does not have the financial reserves necessary to underwrite additional coverage.

635.19(3)(a)2. 2. That the insurer is applying this paragraph uniformly to all small employers in the small group market in the state in accordance with applicable state law and without regard to the claims experience of those small employers or their employees or employees’ dependents or any other health status-related factor of those employees or their dependents.

635.19(3)(b) (b) A small employer insurer that denies coverage under par. (a) may not offer a group health benefit plan in the small group market in the state for 180 days after the date on which the coverage was denied or until the insurer demonstrates to the commissioner that the insurer has sufficient financial reserves to underwrite additional coverage, whichever is later.

635.19(4) (4) Subsection (1) shall not be construed to preclude a small employer insurer from establishing, for the offering of a group health benefit plan in the small group market, any of the following:

635.19(4)(a) (a) Rules or requirements relating to the minimum level or amount of small employer contribution toward the premium for the enrollment of participants and beneficiaries.

635.19(4)(b) (b) Rules or requirements relating to the minimum number or percentage of participants or beneficiaries that must be enrolled in relation to a specified number or percentage of eligible individuals or employees of a small employer.

635.19(5) (5) Subsection (1) does not apply to a group health benefit plan offered by a small employer insurer in the small group market if all of the following apply:

635.19(5)(a) (a) The group health benefit plan is offered in the small group market only through one or more bona fide associations.

635.19(5)(b) (b) The small employer insurer offering the group health benefit plan makes the coverage available to all members of a bona fide association regardless of any health status-related factors of the members or individuals eligible for coverage through the members.

635.19(5)(c) (c) The small employer insurer offering the group health benefit plan complies with any rules of the commissioner that are reasonably designed to prevent the use of an association for risk segmentation.

635.19(6) (6) The commissioner may by rule permit an exception to sub. (1) with respect to a small employer for which coverage is nonrenewed or discontinued for a reason specified under s. 632.749 (2) (a) or (b).

635.19 History History: 1997 a. 27.