Ala. Admin. Code r. 482-1-116-.08

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

Section 482-1-116-.08 - Standards To Assure Fair Marketing

(a) Subject to Subdivision (1) of Subsection (a) of Section 7, each small employer carrier shall actively market all health benefit plans sold by the carrier to eligible small employers in the state.

(b)

(1) Except as provided in Subdivision (2), no small employer carrier or producer shall, directly or indirectly, engage in the following activities:

a. Encouraging or directing small employers to refrain from filing an application for coverage with the small employer carrier because of the health status, claims experience, industry, occupation or geographic location of the small employer.

b. Encouraging or directing small employers to seek coverage from another carrier because of the health status, claims experience, industry, occupation or geographic location of the small employer.

(2) The provisions of Subdivision (1) shall not apply with respect to information provided by a small employer carrier or producer to a small employer regarding the established geographic service area or a restricted network provision of a small employer carrier.

(c)

(1) Except as provided in Subdivision (2), no small employer carrier shall, directly or indirectly, enter into any contract, agreement or arrangement with a producer that provides for or results in the compensation paid to a producer for the sale of a health benefit plan to be varied because of the initial or renewal health status, claims experience, industry, occupation or geographic location of the small employer.

(2) Subdivision (1) shall not apply with respect to a compensation arrangement that provides compensation to a producer on the basis of percentage of premium, provided that the percentage shall not vary because of the health status, claims experience, industry, occupation or geographic area of the small employer.

(d) No small employer carrier may terminate, fail to renew or limit its contract or agreement of representation with a producer for any reason related to the initial or renewal health status, claims experience, occupation or geographic location of the small employers placed by the producer with the small employer carrier.

(e) A small employer carrier or producer may not induce or otherwise encourage a small employer to separate or otherwise exclude an employee or dependent from health coverage or benefits provided in connection with the employee's employment.

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

(g)

(1) A violation of this section by a small employer carrier or a producer shall be considered an unfair trade practice pursuant to Section 27-12-2, Code of Ala. 1975.

(2) If a small employer carrier enters into a contract, agreement or other arrangement with a third-party administrator to provide administrative, marketing or other services related to the offering of health benefit plans to small employers in this state, the third-party administrator shall be subject to this section as if it were a small employer carrier.

Author: Reyn Norman, Associate Counsel

Ala. Admin. Code r. 482-1-116-.08

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.