Chapter Ins 8

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 Act 289 repealed s. 635.17, Stats.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 Act 289 repealed s. 635.17, Stats.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) 

Ins 8.68(10)(a) (a) An insurer offering individual or group health benefit plans or coverage under a trust or association health benefit plan in this state shall investigate and determine whether the plans are subject to this subchapter and ch. 635, Stats. An insurer shall obtain the following information from applicants for individual and group health benefit plans at the time of application:

Ins 8.68(10)(a)1. 1. Whether or not any portion of the premium will be paid by or on behalf of a small employer, either directly or through wage adjustments or other means of reimbursement;

Ins 8.68(10)(a)2. 2. Whether or not any portion of the premium will be collected by or with the cooperation of a small employer; and

Ins 8.68(10)(a)3. 3. Whether or not the prospective policyholder, certificate holder or any prospective insured individual intends to treat the health benefit plan as part of a plan or program under Section 162, Section 125 or Section 106 of the United States internal revenue code.

Ins 8.68(10)(b) (b) If a small employer insurer fails to comply with par. (a), the small employer insurer is deemed to be on notice of any information that could reasonably have been obtained if the small employer insurer had complied with par. (a).

Ins 8.68(10)(c) (c) An insurer is not relieved from complying with ch. 635, Stats., and there is no presumption that ch. 635, Stats., does not apply merely because the insurer has complied with the minimum obligation to investigate the status of applicants imposed under this subsection.

Ins 8.68(11) (11) No small employer insurer may permit an insurance intermediary to advise, and no insurance intermediary may advise, a small employer whether the insurer may accept the small employer’s application for coverage under a health benefit plan based on claims experience or health conditions of the group except after submittal of an application and review by the insurer.

Ins 8.68(12) (12) A small employer insurer shall annually file information with the commissioner related to health benefit plans issued by the small employer insurer to small employers in this state in the form prescribed by the commissioner.

Ins 8.68 Note Note: Copies of forms referred to in this section may be obtained without charge from the Office of the Commissioner of Insurance by sending a written request to P. O. Box 7873, Madison, Wisconsin 53707-7873.

Ins 8.68 History History: Cr. Register, November, 1993, No. 455, eff. 2-1-94; correction in (10) (a) made under 13.93 (2m) (b) 7., Register, March, 2000, No. 531; corrections in (3) (b) and (c) (intro.) made under s. 13.93 (2m) (b) 7., Stats., Register October 2002 No. 562; CR 17-015: r. (3) (b), (c), am. (4) Register December 2017 No. 744, eff. 1-1-18.

Ins 8.69 Ins 8.69 Minimum standards for market share of basic health benefit plans in force; exemption from guarantee issuance of the basic health benefit plan.

Ins 8.69(1) (1) No small employer insurer may have a basic market share ratio which is significantly less than the basic market share ratio for all small employer insurers unless the insurer establishes by clear and convincing evidence that the reason the basic market share ratio is significantly less is because:

Ins 8.69(1)(a) (a) Of a specific practice or condition that is beyond the control of the insurer; or

Ins 8.69(1)(b) (b) The insurer uses risk characteristics to underwrite applications for policies to a substantially lesser extent than most other small employer insurers.

Ins 8.69(2) (2) No small employer insurer may have a market share ratio which is significantly less than the market share ratio for all small employer insurers unless the small employer insurer establishes by clear and convincing evidence that the reason the market share ratio is significantly less is because:

Ins 8.69(2)(a) (a) Of a specific practice or condition that is beyond the control of the insurer; or

Ins 8.69(2)(b) (b) The insurer uses risk characteristics to underwrite applications for policies to a substantially lesser extent than most other small employer insurers.

Ins 8.69(3) (3) For the purpose of this section:

Ins 8.69(3)(a) (a) A small employer insurer’s basic market share ratio is presumed to be significantly less than the basic market share ratio for all small employer insurers if the small employer insurer’s basic market share ratio is less than a number equal to q-2. For the purpose of this paragraph:

Ins 8.69(3)(a)1. 1. ‘m’ is the number of basic health benefit plans the small employer insurer has in force; and

Ins 8.69(3)(a)2. 2. ‘q’ is the basic market share ratio for all small employer insurers.

Ins 8.69(3)(b) (b) A small employer insurer’s market share ratio is presumed to be significantly less than the market share ratio for all small employer insurers if the small employer insurer’s market share ratio is less than a number equal to p-2. For the purpose of this paragraph:

Ins 8.69(3)(b)1. 1. ‘n’ is the number of policies the small employer insurer has in force; and