Ala. Admin. Code r. 482-1-116-.06

Current through Register Vol. 43, No. 1, October 31, 2024

Section 482-1-116-.06 - Renewability Of Coverage

(a) A health benefit plan subject to this Regulation shall be renewable with respect to all eligible employees or dependents, at the option of the small employer, except in any of the following cases:

(1) Nonpayment of the required premiums.

(2) Fraud or intentional misrepresentation of a material fact by the small employer or, with respect to coverage of individual insureds, the insureds or their representatives.

(3) Noncompliance with the carrier's minimum participation requirements.

(4) Noncompliance with the carrier's employer contribution requirements.

(5) The small employer carrier elects to nonrenew all of its health benefit plans delivered or issued for delivery to small employers in this state. In such a case the carrier shall:

a. Provide advance notice of its decision under this Subdivision to the commissioner in each state in which it is licensed; and

b. Provide notice of the decision not to renew coverage to all affected small employers, insureds and to the commissioner in each state in which an affected insured individual is known to reside at least 180 days prior to the nonrenewal of any health benefit plans by the carrier. Notice to the commissioner under this Paragraph shall be provided at least three (3) working days prior to the notice to the affected small employers.

(6) The commissioner finds that the continuation of the coverage would not be in the best interests of the policyholders or certificate holders; or would impair the carrier's ability to meet its contractual obligations. In such instance, the commissioner shall assist affected small employers in finding replacement coverage. In the case of a health maintenance organization, the decision by the Commissioner shall have been made in consultation with, and with the approval of, the State Health Officer.

(7) The small employer carrier elects to discontinue the sale of the health benefit plan to small employers in this state. In such a case, the carrier shall:

a. Provide 90 days advance notice of its decision to the small employers covered by the discontinued health benefit plan in this state; and

b. Offer each affected small employer an option to purchase any other small group health benefit plan offered by the carrier in this state.

c. The offer in Paragraph b. must be made uniformly to all affected small employers in this state without regard to health status related factors.

(8) Association membership ceases, provided that the rules for cessation are applied uniformly without regard to health status related factors.

(b) A small employer carrier that elects not to renew a health benefit plan under Subdivision (5) of Subsection (a) shall be prohibited from writing new business in the small employer market in this state for a period of five (5) years from the date of notice to the commissioner.

(c) In the case of a small employer carrier doing business in one established geographic service area of the state, the rules set forth in this subsection shall apply only to the carrier's operations in that service area.

Author: Reyn Norman, Associate Counsel

Ala. Admin. Code r. 482-1-116-.06

New Rule: September 3, 1997; effective September 28, 1997. Amended: October 14, 1999; effective January 1, 2000. Amended: September 12, 2001; effective October 1, 2001. Filed with LRS September 14, 2001. Rule is not subject to the Alabama Administrative Procedure Act.

Statutory Authority:Code of Ala. 1975, § 27-52-21.