Chapter Ins 8

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 Act 289 repealed s. 635.17, Stats.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.

Ins 8.64(2) (2) An insurance intermediary shall notify a small employer insurer in writing, prior to submitting an application for coverage with the insurer on behalf of a small employer, or prior to transmittal of a waiver, of any circumstances that would indicate that the small employer pressured or unfairly induced an eligible employee or dependent of an eligible employee to decline coverage due to the individual’s risk characteristics.

Ins 8.64 History History: Cr. Register, November, 1993, No. 455, eff. 2-1-94.

Ins 8.65 Ins 8.65 A small employer insurer shall require small employers to provide documentation to establish that waivers of coverage are voluntary and permitted.

Ins 8.65(1) (1) A small employer insurer shall require each small employer that applies for a policy, as part of the application process, to provide a complete list of eligible employees and dependents of eligible employees of the small employer. The small employer insurer shall require the small employer to provide appropriate supporting documentation, such as the state unemployment or worker’s compensation quarterly reporting forms, to verify the information required under this subsection.

Ins 8.65(2) (2) A small employer insurer shall secure a waiver signed by the eligible employee on behalf of the employee or the dependent of the employee with respect to each eligible employee, and each dependent of an eligible employee, who declines an offer of coverage under a policy, whether during an initial enrollment period, as a new entrant or as an underwritten individual. The small employer insurer shall include on the waiver and require:

Ins 8.65(2)(a) (a) A certification that the individual who declined coverage was informed of the availability of coverage under the policy;

Ins 8.65(2)(b) (b) That the reason for declining coverage be stated; and

Ins 8.65(2)(c) (c) A written warning of the consequences which may be imposed on late enrollees.

Ins 8.65(3) (3) A small employer insurer shall obtain, with respect to each individual who submits a waiver under sub. (2) in connection with an initial enrollment period, information sufficient to establish that the waiver may be accepted under s. Ins 8.60 (1).

Ins 8.65(4) (4) A small employer insurer shall maintain waivers required under sub. (2), the information required to be obtained under sub. (3) and notifications under s. Ins 8.64 (2), for a period of 3 years or until the policy terminates, whichever is later.

Ins 8.65(5) (5) A small employer insurer may not issue coverage to a small employer that refuses to provide the list required under sub. (1), a waiver required under sub. (2) or information required under sub. (3).

Ins 8.65 History History: Cr. Register, November, 1993, No. 455, eff. 2-1-94.

Ins 8.66 Ins 8.66 Qualifying coverage for portability and late enrollees; transition.

Ins 8.66(1) (1) For the purpose of determining whether a health benefit plan or other health benefit arrangement is qualifying coverage under s. 635.17, Stats., or under this subchapter:

Ins 8.66 Note Note: 1995 Wis. Act 289 repealed s. 635.17, Stats. See s. 632.745 (4), Stats.

Ins 8.66(1)(a) (a) A health insurance policy, certificate or other health benefit arrangement is employer-based if an employer sponsors the plan or arrangement or makes a contribution to the plan or arrangement.

Ins 8.66(1)(b) (b) A health insurance policy, certificate or other benefit arrangement provides benefits similar to or exceeding the benefits provided under the basic health benefit plan if the policy, certificate or other benefit arrangement provides benefits that:

Ins 8.66(1)(b)1. 1. Have an actuarial value as considered for a normal distribution of groups that is not substantially less than the actuarial value of the basic health benefit plan; or

Ins 8.66(1)(b)2. 2. Provides coverage for hospitalization and physician services that is substantially similar to or exceeds the coverage for those services in the basic health benefit plan.

Ins 8.66(1)(c) (c) A small employer insurer shall evaluate a previous or existing policy, certificate or other benefit arrangement taken as a whole and shall not base its determination on the fact that one or more portions of the previous or existing policy, certificate or benefit arrangement provides less coverage than the comparable portion of the basic health benefit plan.

Ins 8.66(2) (2) For the purposes of s. 635.17 (1) (b), Stats., an individual has previous qualifying coverage with respect to a particular service if the previous policy, certificate or other benefit arrangement covering the individual was qualifying coverage and provided any benefit with respect to the service.

Ins 8.66 Note Note: 1995 Wis. Act 289 repealed s. 635.17, Stats. See s. 632.746 (1) and (3), Stats.

Ins 8.66(3) (3) To the extent necessary to comply with this section and s. 635.17, Stats., a small employer insurer shall ascertain the source of previous or existing coverage of each eligible employee and each dependent of an eligible employee at the time the employee or dependent initially enrolls in the health benefit plan provided by the small employer insurer. The small employer insurer shall contact the source of previous or existing coverage to resolve any questions about the benefits or limitations related to the previous or existing coverage.

Ins 8.66 Note Note: 1995 Wis. Act 289 repealed s. 635.17, Stats. See s. 632.746, Stats.

Ins 8.66(4) (4) No small employer insurer may renew or issue a policy after November 30, 1993, unless the policy includes a provision complying with s. 635.17 (1) (b), Stats., as to qualifying coverage defined in s. 635.02 (5m) (b) and (c), Stats., in addition to qualifying coverage defined in s. 635.02 (5m) (a), Stats. An insurer shall administratively comply with s. 635.17 (1) (b), Stats., for all policies in force on or after July 1, 1993, with respect to qualifying coverage defined under s. 635.02 (5m) (b) and (c), Stats., for all individuals who commence coverage under a policy after June 30, 1993. All small employer insurers shall establish and disseminate policies and procedures designed to ensure compliance with this subsection by not later than December 1, 1993.

Ins 8.66 Note Note: 1995 Wis. Act 289 repealed ss. 635.02 (5m) and 635.17, Stats. See ss. 632.745 (4) and 632.746 (1), Stats.

Ins 8.66(5) (5) An insurer, on request, shall provide to the current insurer of a small employer copies of pertinent health benefit plan provisions, a statement of coverage available and other information reasonably necessary to enable the current insurer to comply with subs. (1) to (3).

Ins 8.66 History History: Cr. Register, November, 1993, No. 455, eff. 12-1-93.

Ins 8.67 Ins 8.67 Restrictive riders prohibited. A restrictive rider, endorsement or other provision that would violate s. 635.17 (3) (b), Stats., and that was in force on May 12, 1992, may not remain in force beyond the first renewal date of the policy and a small employer insurer shall delete the rider, endorsement or other provision after the law’s effective date.

Ins 8.67 Note Note: 1995 Wis. Act 289 repealed s. 635.17, Stats. See s. 632.748 (1), Stats.

Ins 8.67 History History: Cr. Register, November, 1993, No. 455, eff. 2-1-94.

Ins 8.68 Ins 8.68 Fair marketing standards.

Ins 8.68(1) (1) 

Ins 8.68(1)(a) (a) Unless otherwise permitted under par. (b), (c) or (d), a small employer insurer shall actively market its health benefit plans to all small employers and without regard to the size of the small employer group by:

Ins 8.68(1)(a)1. 1. Actively marketing in each segment of the small employer market the basic health benefit plan and at least one form of a policy which provides benefits which materially exceed benefits provided under the basic health benefit plan.

Ins 8.68(1)(a)2. 2. Actively marketing in each area of the state the basic health benefit plan and at least one form of a policy which provides benefits which materially exceed benefits provided under the basic health benefit plan, except a small employer insurer which is, and is likely to remain, in compliance with s. Ins 8.69 may:

Ins 8.68(1)(a)2.a. a. Limit marketing to the provider service areas for the health maintenance organization or preferred provider plans if it limits the policies it offers to the basic health benefit plan and policies which are health maintenance organization plans or preferred provider plans; or

Ins 8.68(1)(a)2.b. b. Limit its marketing of policies to selected areas which the small employer insurer can demonstrate by clear and convincing evidence are selected for justifiable business reasons other than desirable demographic characteristics related to risk selection.

Ins 8.68(1)(b) (b) A small employer insurer may limit marketing and issuance of the basic health benefit plan under s. 635.26 (2m) or (4), Stats., or may limit marketing and issuance of other forms of policies, or both, to a particular segment of the market, only if the segment is not based on the size of the small employer group and the small employer insurer:

Ins 8.68 Note Note: 1997 Wis. Act 27 repealed s. 635.26, Stats. See s. 635.19 (2), Stats.

Ins 8.68(1)(b)1. 1. Files with the commissioner on or after February 1, 1994, in the form prescribed by the commissioner, a request for approval to limit its marketing of policies;

Ins 8.68(1)(b)2. 2. Obtains prior written approval from the commissioner, after the commissioner finds approval is consistent with the purpose of ch. 635, Stats., and the approval is not rescinded;

Ins 8.68(1)(b)3. 3. Complies with this chapter and ch. 635, Stats., with respect to the entire market segment;

Ins 8.68(1)(b)4. 4. Complies with s. Ins 8.69 computed based on the entire market, not only the market segment targeted by the small employer insurer; and

Ins 8.68(1)(b)5. 5. Does not use targeting of a particular market segment as a subterfuge for applying underwriting criteria, including, but not limited to, selling only through a trust or association which limits membership based on health or based on factors which are designed to limit the enrollment of individuals with health conditions.

Ins 8.68(1)(c) (c) Until February 1, 1995, a small employer insurer may limit marketing of health benefit plans to small employers based on the size of the small employer group but:

Ins 8.68(1)(c)1. 1. Only according to the small employer insurer’s marketing practices in effect on July 1, 1993; and

Ins 8.68(1)(c)2. 2. Only if the small employer insurer issues the basic health benefit plan to small employer groups of any size and is in compliance with s. Ins 8.69.

Ins 8.68(1)(d) (d) A small employer insurer may actively market only the basic health benefit plan but only if it does not sell or market any other form of a policy in this state.

Ins 8.68(2) (2) A small employer insurer shall market the basic health benefit plan using at least the same sources and methods of distribution that it uses to market policies other than the basic health benefit plan. A small employer insurer shall authorize all insurance intermediaries who are authorized to market its health benefit plans to also sell its basic health benefit plan.

Ins 8.68(3) (3) A small employer insurer shall offer the basic health benefit plan to a small employer that applies for health insurance coverage from the small employer insurer. The small employer insurer may provide the offer directly to the small employer or may deliver it through an insurance intermediary. The offer shall be in writing and shall include at least all the following information:

Ins 8.68(3)(a) (a) A general description of the benefits contained in the basic health benefit plan.

Ins 8.68(3)(a)1. 1. Will not be eligible for continuation of coverage or a conversion policy;

Ins 8.68(3)(a)2. 2. Will be eligible only as a late enrollee under the health benefit plan then held by the small employer; and

Ins 8.68(3)(a)3. 3. May, as a late enrollee, be subject to the exclusion permitted under s. Ins 8.63 (2).

Ins 8.68(3)(d) (d) Information describing how the small employer may enroll in the plan.

Ins 8.68(4) (4) A small employer insurer shall provide written notice of the information described under sub. (3) (a) to each small employer who applies for a basic health benefit plan within 10 working days of the date the small employer insurer receives the small employer’s application. The small employer insurer shall provide the notice directly or through an authorized insurance intermediary. The small employer 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, within 20 business days after the small employer insurer issues a basic health benefit plan to a small employer, certification that the small employer promptly distributed the notice to all eligible employees.

Ins 8.68(5) (5) 

Ins 8.68(5)(a) (a) A small employer insurer shall provide a price quote for the basic health benefit plan to a small employer directly or through an authorized insurance intermediary within 15 working days of receiving a request for a quote and the information necessary to provide the quote. A small employer insurer shall notify a small employer directly or through an authorized insurance intermediary within 7 working days of receiving a request for a price quote of any additional information needed by the small employer insurer to provide the quote.

Ins 8.68(5)(b) (b) A small employer insurer may not apply more stringent or detailed requirements related to the application process for the basic health benefit plan than are applied for other health benefit plans offered by the insurer to groups of equivalent size.

Ins 8.68(6) (6) 

Ins 8.68(6)(a) (a) If a small employer insurer denies coverage under a health benefit plan to a small employer on the basis of a risk characteristic, the denial shall be in writing and shall state with specificity the reasons for the denial, subject to any restrictions related to confidentiality of medical information. The written denial shall be accompanied by a written explanation of the availability of the basic health benefit plan from the small employer insurer. The explanation shall include at least the following:

Ins 8.68(6)(a)1. 1. A general description of the benefits contained in each plan;

Ins 8.68(6)(a)2. 2. A price quote for each plan; and

Ins 8.68(6)(a)3. 3. Information describing how the small employer may enroll in the plan.

Ins 8.68(6)(b) (b) A small employer insurer shall provide the written information described in par. (a) within the time periods provided under sub. (5) (a) directly to the small employer or delivered through an authorized insurance intermediary.

Ins 8.68(6)(c) (c) The price quote required under par. (a) 2. shall be for the managed care option which will result in the lowest-priced basic health benefit plan for which the small employer is eligible, if the small employer insurer has such an option available in the area where the small employer is located.

Ins 8.68(7) (7) A small employer insurer shall establish and maintain a toll-free telephone service to provide information to small employers regarding the availability of small employer health benefit plans in this state. The toll-free telephone service is not required to be dedicated to this purpose. The service shall provide information to callers on how to apply for coverage from the insurer. The information may include the names and phone numbers of insurance intermediaries actively marketing in the geographic area proximate to the caller or other information that is reasonably designed to assist the caller to locate an authorized insurance intermediary or to otherwise apply for coverage.

Ins 8.68(8) (8) A small employer insurer may not require a small employer to join or contribute to any association or group as a condition of being accepted for coverage by the small employer insurer, except that, if an association or group requires membership in the association or other group as a condition for accepting a small employer into a particular health benefit plan, the small employer insurer may apply the requirement if:

Ins 8.68(8)(a) (a) The requirement is reasonable;

Ins 8.68(8)(b) (b) The requirement is not intended to and does not discourage or prevent acceptance of small employers applying for the basic health benefit plan;

Ins 8.68(8)(c) (c) The requirement is not related to the health status or claim experience of the small employer or employees or dependents of employees of small employers;

Ins 8.68(8)(d) (d) The requirement is applied consistently to all small employers applying for coverage; and

Ins 8.68(8)(e) (e) The small employer insurer permits all small employers who join the association or group to apply for a health benefit plan.

Ins 8.68(9) (9) A small employer insurer may not require, as a condition to the offer or sale of a health benefit plan to a small employer, that the small employer purchase or qualify for any other insurance product or service or purchase or qualify for a health benefit plan which includes coverage other than health coverage.

Ins 8.68(10) (10)