Chapter Ins 8

Ins 8.30 Ins 8.30 Notification to office. An administrator shall notify the office in writing of any of the following within 30 days after the date of the occurrence:

Ins 8.30(1) (1) The cessation of business activities as an administrator. A notification under this subsection shall include the name and address of the custodian of the administrator’s business records and the location of those records.

Ins 8.30(2) (2) Any change in the administrator’s business mailing address or the location of its business records.

Ins 8.30(3) (3) Formal administrative action in this state or another state by an agency that regulates the business of administrators, insurance, real estate, securities or financial institutions against the administrator or any officer, director, partner or other individual having comparable responsibilities in the corporation or partnership.

Ins 8.30(4) (4) The conviction in this state or another state of a felony or misdemeanor, other than a misdemeanor related to the use of a motor vehicle or the violation of a fish and game regulation, of the administrator or any of the officers, directors, partners or other persons having comparable responsibilities in the corporation or partnership.

Ins 8.30 History History: Cr. Register, April, 1992, No. 436, eff. 5-1-92.

Ins 8.32 Ins 8.32 Audit. In order to determine whether the financial resources of an administrator are adequate to safeguard the interests of the public and persons covered by a plan, or to determine the appropriate bond amount under s. Ins 8.28, the office may order the administrator to submit financial statements that have been audited by a certified public accountant.

Ins 8.32 History History: Cr. Register, April, 1992, No. 436, eff. 5-1-92.

subch. III of ch. Ins 8 Subchapter III — Small Employer Health Insurance

Ins 8.40 Ins 8.40 Purpose. This subchapter interprets and implements ch. 635, Stats.

Ins 8.40 History History: Cr. Register, October, 1992, No. 442, eff. 11-1-92; am. Register, November, 1993, No. 455, eff. 2-1-94; correction made under s. 13.93 (2m) (b) 7., Stats., Register October 2002 No. 562; CR 17-015: am. Register December 2017 No. 744, eff. 1-1-18.

Ins 8.42 Ins 8.42 Definitions. In addition to the definitions in s. 635.02, Stats., which apply to this subchapter, in this subchapter:

Ins 8.42(1) (1) “Basic market share ratio” means the ratio of the number of risk characteristic basic health benefit plans in force to the total number of basic health benefit plans in force.

Ins 8.42(2) (2) “Commissioner” means the commissioner of insurance.

Ins 8.42(3) (3) “Initial enrollment period” means a period prior to issuance of a policy during which eligible employees, and dependents of eligible employees, are entitled to enroll in coverage under the policy.

Ins 8.42(4) (4) “Late enrollee” means an eligible employee, or dependent of an eligible employee, who does not request coverage under a policy during an enrollment period in which the individual is entitled to enroll in the policy, and who subsequently requests coverage under the policy, regardless of whether the enrollment period was held prior to, on or after the law’s effective date. “Late enrollee” does not include an individual who is a new entrant under sub. (7) (b) or (c).

Ins 8.42(5) (5) “Law’s effective date” means May 12, 1992, or the first renewal date of a policy which occurs on or after May 12, 1992, whichever is later.

Ins 8.42(6) (6) “Market share ratio” means the ratio of the number of risk characteristic basic health benefit plans in force to the total number of policies in force.

Ins 8.42(7) (7) “New entrant” means an eligible employee, or the dependent of an eligible employee, who:

Ins 8.42(7)(a) (a) Becomes part of an employer group on or after the law’s effective date and after commencement of an initial enrollment period;

Ins 8.42(7)(b) (b) Is a spouse, minor or dependent under a covered employee’s policy who a court orders be covered under the policy and who requests enrollment within 30 days after issuance of the court order; or

Ins 8.42(7)(c) (c) Failed to request enrollment in the policy during an enrollment period which commenced prior to, on or after the law’s effective date, during which the individual was entitled to enroll in the policy, if the individual:

Ins 8.42(7)(c)2. 2. Subsequently, and on or after February 1, 1994, loses coverage under the qualifying coverage; and

Ins 8.42(7)(c)3. 3. Requests enrollment within 30 days after termination of the qualifying coverage.

Ins 8.42(8) (8) “Office” means the office of the commissioner.

Ins 8.42(9) (9) “Policy” means any of the following:

Ins 8.42(9)(a) (a) A group health benefit plan issued to a small employer.

Ins 8.42(9)(b) (b) An individual health benefit plan, including, but not limited to, an individual health benefit plan which is intended or designed to supplement a basic health benefit plan, issued by an insurer to an eligible employee if 3 or more eligible employees of the same small employer apply for the coverage or were intentionally excluded from applying for reasons related to their health, and the individual health benefit plan is in fact, or in substance, sold to, or through active cooperation of, the small employer, including but not limited to circumstances where:

Ins 8.42(9)(b)1. 1. Premium is collected through a direct or indirect arrangement with the small employer;

Ins 8.42(9)(b)2. 2. The individual health benefit plan is in substance a replacement for group health benefit plan coverage provided through the small employer;

Ins 8.42(9)(b)3. 3. The small employer directly or indirectly contributes toward a portion of the premium for the individual health benefit plan; or

Ins 8.42(9)(b)4. 4. An eligible employee is solicited to purchase the individual health benefit plan on the premises of the small employer and with the consent and cooperation of the small employer or the small employer participates in the solicitation of the eligible employee.

Ins 8.42(9)(c) (c) For a health benefit plan that provides coverage through a trust or association, a certificate or other evidence of coverage, including, but not limited to, coverage intended or designed to supplement a basic health benefit plan, issued to an individual small employer or in fact or substance, sold to, or through the active cooperation of, the small employer, including but not limited to circumstances where:

Ins 8.42(9)(c)1. 1. Premium is collected through a direct or indirect arrangement with the small employer;

Ins 8.42(9)(c)2. 2. The coverage is in substance a replacement for group health benefit plan coverage provided through the small employer;

Ins 8.42(9)(c)3. 3. The small employer directly or indirectly contributes toward a portion of the premium for the coverage; or

Ins 8.42(9)(c)4. 4. An eligible employee is solicited to purchase the coverage on the premises of the small employer and with the consent and cooperation of the small employer or the small employer participates in the solicitation of the eligible employee.

Ins 8.42(9)(d) (d) A group health benefit plan which supplements or is designed to supplement the basic health benefit plan.

Ins 8.42(10) (10) “Risk characteristic” means the health status, claims experience, duration of coverage, or any similar characteristic related to the health status or experience of a small employer group or of any member of a small employer group.

Ins 8.42(11) (11) “Risk characteristic basic health benefit plan” means a basic health benefit plan which, when issued, is issued to a small employer group which:

Ins 8.42(11)(a) (a) Is not eligible for any policy available from the small employer insurer, other than the basic health benefit plan or health benefit plans that do not provide benefits similar to or exceeding benefits provided under the basic health benefit plan as determined under s. Ins 8.66 (1), under the underwriting standards of the small employer insurer and based on the small employer group’s risk characteristics; or

Ins 8.42(11)(b) (b) Is assigned a rate for the basic health benefit plan which exceeds the new business premium rate for the basic health benefit plan by 15% or more.

Ins 8.42(12) (12) “Risk load” means the percentage above the applicable base premium rate that is charged by a small employer insurer to a small employer to reflect the risk characteristics of the small employer group.

Ins 8.42(13) (13) “Underwritten individual” means an individual who, prior to the law’s effective date, requested but was excluded from coverage, or denied coverage, under a policy, whether issued by the current insurer or a preceding insurer, and continued to be and is an eligible employee, or dependent of an eligible employee, of the small employer.

Ins 8.42 History History: Cr. Register, October, 1992, No. 442, eff. 11-1-92; renum. (1) to (3) to be (2), (8) and (9) and am. (9) (b) and (c), cr. (1), (3) to (7), (9) (d), (10) to (13), Register, November, 1993, No. 455, eff. 2-1-94; corrections in (4) (a), (b), (7) (c) 1. and (13) made under s. 13.93 (2m) (b) 7., Stats., Register October 2002 No. 562; CR 17-015: consol. (4) (intro.) and (c) and renum. to (4) and am., r. (4) (a), (b), (7) (c) 1., am. (13) Register December 2017 No. 744, eff. 1-1-18.

Ins 8.44 Ins 8.44 Applicability; exclusion.

Ins 8.44(1) (1) Chapter 635, Stats., and this subchapter apply to a policy issued to, or renewal for, an employer if the number of eligible employees in this state was not less than 2 nor more than 25 during at least 50% of the number of weeks the employer was actively engaged in the business enterprise during the 12 months preceding the date of application or the policy renewal date.

Ins 8.44(2) (2) A small employer insurer shall notify each employer in writing when a policy is issued that if the employer employs less than 2 or more than 25 eligible employees during at least 50% of the number of weeks in any 12-month period, or moves the business enterprise outside this state, the protections provided under ch. 635, Stats., and this subchapter will cease to apply to the employer on renewal of its health benefit plan.

Ins 8.44(3) (3) In addition to the types of policies excluded under s. 635.02 (3m), ch. 635, Stats., and this subchapter do not apply to policies providing only specified disease coverage or to hospital indemnity policies, as defined in s. 632.895 (1) (c), Stats.

Ins 8.44 History History: Cr. Register, October, 1992, No. 442, eff. 11-1-92; am. (1), renum. (2) to be (3), cr. (2), Register, November, 1993, No. 455, eff. 2-1-94; corrections in (intro.), (2) and (3) made under 13.93 (2m) (b) 7., Register, March, 2000, No. 531; reprinted to correct error in sub. (3) Register February 2011 No. 662.

Ins 8.46 Ins 8.46 Required policy provisions. Each policy shall include all of the following:

Ins 8.46(1) (1) On the face page or first page, a statement that the policy is guaranteed renewable except for the reasons stated in the policy, which shall be consistent with s. 635.07 (1) and (2), Stats.

Ins 8.46 Note Note: 1995 Wis. Act 289 repealed s. 635.07, Stats. See ss. 632.749 (2) and 635.19 (3), Stats.

Ins 8.46(2) (2) A statement of the minimum number of eligible employees required in order to keep the policy in effect, expressed either as a schedule or as a percentage of eligible employees or both. The small employer insurer shall state the method for determining the minimum number required in the policy or employer agreement. For purposes of this subsection, “eligible employee” does not include any person who has continued coverage under s. 632.897 (2) (b) 2., Stats., under a small employer’s group policy and the number of individuals in a group shall not include individuals with other qualifying coverage except as permitted under s. 635.17 (2) (c) 2., Stats. A small employer insurer may not impose more stringent requirements than the following:

Ins 8.46 Note Note: 1995 Wis. Act 289 repealed s. 635.17, Stats. See s. 632.749 (2), Stats.

Ins 8.46(2)(a) (a) For a small employer with more than 10 eligible employees, 70% of the group.

Ins 8.46(2)(b) (b) For a small employer with 10 eligible employees, 6 eligible employees.

Ins 8.46(2)(c) (c) For a small employer with 8 or 9 eligible employees, 5 eligible employees.

Ins 8.46(2)(d) (d) For a small employer with 7 eligible employees, 4 eligible employees.

Ins 8.46(2)(e) (e) For a small employer with 5 or 6 eligible employees, 3 eligible employees.

Ins 8.46(2)(f) (f) For a small employer with 2 to 4 eligible employees, 2 eligible employees.

Ins 8.46 History History: Cr. Register, October, 1992, No. 442, eff. 11-1-92; am. (2), Register, November, 1993, No. 455, eff. 2-1-94.

Ins 8.48 Ins 8.48 Solicitation; disclosure requirements.

Ins 8.48(1) (1) Agents. Before completing an application for a policy, an agent shall provide the small employer or representative of the small employer or the individual applicant with a form stating the information required under s. 635.11 (1m), Stats. The agent shall sign and date the form certifying that he or she made the required disclosure and shall obtain the signature of the small employer or representative of the small employer or the individual applicant on the form. The agent shall give one copy of the completed form to the person who signed it. The agent or small employer insurer shall retain one copy of the completed form.

Ins 8.48(2) (2) Small employer insurers. A small employer insurer that does not use agents to solicit or sell policies shall, with any solicitation material, provide the small employer or individual applicant with a form stating the information required under s. 635.11 (1m), Stats. The small employer insurer shall secure with or as part of each application a form signed by the small employer, a representative of the small employer or individual applicant stating that he or she has received the information. The small employer insurer shall provide a copy to the person who signed the form no later than the date the policy is issued.

Ins 8.48 History History: Cr. Register, October, 1992, No. 442, eff. 11-1-92; corrections made under s. 13.93 (2m) (b) 7., Stats., Register October 2002 No. 562.

Ins 8.49 Ins 8.49 Uniform employee application form.

Ins 8.49(1) (1) 

Ins 8.49(1)(a) (a) In accordance with s. 635.10, Stats., small employer insurers shall use the small employer uniform employee application form as the only acceptable form when small employers apply for coverage from small employer insurers. Small employer insurers shall implement procedures and policies necessary to use the small employer uniform employee application form.

Ins 8.49(1)(b) (b) Small employer insurers shall treat and accept a copy of the uniform employee application as an original.

Ins 8.49(1)(c) (c) The contents of the uniform small employer application shall not vary, except as permitted in par. (d), from the text or format including bold character, line spacing, the use of boxes around text and shall use a type size of at least 10 points as delineated in form OCI 26-501.

Ins 8.49(1)(d) (d) Small employer insurers and licensed intermediaries may pre-print the name of the small employer insurer on the uniform employee application provided that the form contains at least 3 additional spaces to insert the names of insurers to whom the uniform applications may be sent and the form complies with par. (c).

Ins 8.49 Note Note: A copy of the uniform employee application form OCI 26-501 (c. 2/2004), required in par. (a), may be obtained at no cost from the Office of the Commissioner of Insurance, P.O. Box 7873, Madison WI 53707-7873, or at the Office’s web address: oci.wi.gov.

Ins 8.49(2) (2) 

Ins 8.49(2)(a) (a) The information contained within each uniform employee application shall be considered current information by the small employer insurer if the information is received by the small employer insurer within 45 days of completion of the earliest signed and completed uniform employee application form. For the period of time that the information contained within the uniform employee application is considered current, small employer insurers may not require a small employer employee to complete a new application form or any document, addendum or certification representing that the information contained in the completed uniform employee applications is current.

Ins 8.49(2)(b) (b) A small employer insurer may accept and utilize information provided by a small employer employee subsequent to the date the employee signed the completed application if the employee is providing the insurer with additional or modified information.

Ins 8.49(2)(c) (c) A small employer insurer may require small employer employees to complete and submit new uniform employee applications if either of the following occurs:

Ins 8.49(2)(c)1. 1. The authorization signed by the employees does not include the name of the small employer insurer that the small employer is requesting provide it with an underwritten premium amount and coverage.

Ins 8.49(2)(c)2. 2. The completed uniform employee applications are received by the small employer insurer after 45 days of completion of the earliest signed and completed uniform employee application.

Ins 8.49(3) (3) 

Ins 8.49(3)(a) (a) Small employer insurers that receive a written request from a small employer to forward copies of the completed uniform employee applications to a different small employer insurer listed within the authorization section of the application shall forward copies of the uniform employee applications within 5 business days from receipt of the request without requiring a fee be paid for the photocopying or delivery of the copies of completed uniform employee applications. The small employer insurer shall notify the employer, as soon as practicable, if the small employer insurer is unable to comply with the request because the small employer has requested that information be sent to a small employer insurer not identified within the authorization.

Ins 8.49(3)(b) (b) An intermediary shall forward, within 5 business days from receipt of the applications, copies of the uniform employee applications to all small employer insurers identified within the uniform employee application authorization to receive the applications, or to an authorized representative of each small employer insurer. The intermediary may withhold distribution to a small employer insurer, or the insurer’s authorized representative, at the request of the small employer.

Ins 8.49(3)(c) (c) Completed uniform employee applications shall be maintained by small employer insurers and licensed intermediaries, as applicable, in accordance with subch. V of ch. Ins 25.

Ins 8.49(4) (4) 

Ins 8.49(4)(a) (a) Small employer insurers shall either state the premium to the small employer within 10 business days from receipt of all pertinent information required for its underwriting of the small employer’s application for group health insurance, including completed uniform employee applications, or deny the application in accordance with s. 635.18 (6), Stats.

Ins 8.49(4)(b) (b) Small employer insurers shall make a reasonable effort to promptly obtain information it determines is necessary to make an underwriting decision including the information described in par. (a).

Ins 8.49 History History: CR 03-055: cr. Register April 2004 No. 580, eff. 5-1-04.

APPENDIX 1

Employee Name_______________________