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Group Market Insurance Provisions

(Title I, Subtitle A)

Effective date: July 1, 1997

Scope

The law does not apply to "one-life groups" nor do they apply to a plan's provision of "excepted benefits" (see "health coverage defined" under this section).

Whole group coverage

  • Neither group plan carriers nor employer-sponsored plans (whether insured or self-insured) may establish rules for eligibility (including continued eligibility) of any individuals or their dependents to enroll in the plan based on:
    • Health status;
    • Medical condition (including both physical and mental illnesses);
    • Claims experience;
    • Receipt of health care, medical history, genetic information;
    • Evidence of insurability (including conditions arising out of acts of domestic violence); or
    • Disability.
  • The definition of group plan/coverage is not intended to require a plan to provide benefits not otherwise provided under the terms of the plan/coverage or to prevent establishing limitations or restrictions on the amount, extent, or nature of the benefits for similarly situated individuals enrolled in the plan/coverage.
  • Neither Group plan carrier nor employer-sponsored plans may require an individual (or its dependent) to pay a premium or contribution which is greater than that charged to a similarly situated individual, on the basis of any health status-related factor.

Limitation period on pre-existing condition exclusions

  • Permits a group health plan to impose a pre-existing condition exclusion if it relates to a condition (whether physical or mental), whether or not medical advice, diagnosis, care, or treatment was recommended or received within a six month ("look-back") period ending on enrollment date.
  • Pre-existing condition exclusions are limited to 12 months (18 months for late enrollees).
  • No exclusions are allowed for pregnancy or for newborns or adopted children who are covered promptly (within 30 days after birth or placement for adoption).
  • Genetic information may not be considered as a pre-existing condition in the absence of a diagnosis of the condition related to such information.
  • States may require shorter exclusion periods, look-back periods, or affiliation periods, and may prohibit the application of pre-existing condition exclusions entirely to additional situations or conditions.

Prior continuous coverage credit and certification

  • Group health and employer-sponsored plans must credit qualifying prior coverage toward pre-existing condition exclusions, as long as coverage has not lapsed longer than 63 days. Waiting periods and affiliation periods are not considered lapses in coverage. States may allow longer lapses before continuous coverage is broken.
  • Creditable coverage includes:
    • Any group coverage (including governmental or church plan);
    • Individual coverage;
    • Medicare;
    • Medicaid;
    • CHAMPUS;
    • Indian Health Service or tribal organization coverage;
    • State high risk pool coverage;
    • The FEHBP;
    • Peace Corps, or
    • A "public health plan" (as defined in regulations).
  • Group health and employer-sponsored plans are required to provide certification of coverage to individuals whose coverage is terminated and include dates of coverage (including COBRA) and waiting periods, if any. A second copy must be provided if requested within 24 months.
  • Group health and employer-sponsored plans receiving an individual may accept prior coverage without regard to benefits covered, or may elect to evaluate prior coverage on a "class- or category-of-benefit" basis (to be defined in regulations), but only if they do so for all participants and beneficiaries. If the latter election is made, the plan may be charged for the reasonable cost of providing the class-of-benefit information.

Special enrollment for eligible individuals

  • Requires special enrollment periods for employees and dependents who declined coverage initially because they had other group coverage (either COBRA or employer-provided), and who have either lost eligibility for that coverage or employer contributions toward it have been terminated. Enrollment must be requested within 30 days after loss of the other coverage.
  • Requires special enrollment periods for newborns, adopted children and newly married spouses and does not permit waiting periods or delays in coverage for those who enroll within 30 days of the relevant event.
  • States may require additional special enrollment periods.

Small group guaranteed availability

  • Requires all health plan carriers offering coverage in the small employer market (defined as two to 50 employees) to accept every small employer that applies for coverage and to accept all eligible individuals (and their dependents) who apply when they first becomes eligible, regardless of health status.
  • Eligible individual is determined in accordance with the terms of the health plan, by the carrier's uniformly applicable rules, and consistent with all applicable state laws.

Exceptions to small group guaranteed availability

  • Exceptions to the guarantee-issue requirement are allowed for inadequate network capacity, inadequate financial capacity, and applicants not in the plan's service area. Use of minimum participation or employer contribution requirements is allowed, per applicable state law.

Guaranteed renewability of group coverage

  • Requires guaranteed renewal of all products by all group health plan carriers:
  • Coverage is renewable except for the normal circumstances (non-payment, fraud, etc.)
  • Carriers may cancel a form with a 90-day notice and an offer of replacement coverage.
  • Carriers may cancel all forms in a state with 180-day notice. Must stay out of the market for five years.

Exceptions to guaranteed renewability of group coverage

  • Non-renewal of groups is allowed for:
    • Nonpayment of premiums;
    • Fraud or misrepresentation;
    • Carrier market exit;
    • Failure to meet minimum contribution or participation requirements; or
    • For network plans -- if there is no longer any enrollee in the group who lives, resides or works in the plan's service area, or if the employer is no longer a member of the association sponsoring the coverage.
Disclosure of information by health plan issuers

  • Requires health plan carrier to make a reasonable disclosure of the availability of information as part of the carrier's solicitation and sales materials for small employers.
  • At the small employer's request, carriers must provide information about the carrier's right to change premium rates and factors affecting changes, renewability provisions, and pre-existing condition provisions, and about the benefits and premiums available "under all health insurance coverage for which the employer is qualified." Proprietary or trade secret information need not be disclosed.
  • ERISA plans are required to notify participants about changes in covered services or benefits.

Health Coverage Defined

  • The law applies to plans providing medical care and generally does not apply to plans meeting additional requirements and providing any of a list of "excepted benefits." These plans are:
    • Coverage only for accident, or disability income insurance, or any combination thereof;
    • Coverage issued as a supplement to liability insurance;
    • Liability insurance, including general liability insurance and automobile liability insurance;
    • Workers' compensation or similar insurance;
    • Automobile medical payment insurance;
    • Credit-only insurance;
    • Coverage for on-site medical clinics; and
    • Other similar insurance coverage, specified in regulations, under which benefits for medical care are secondary and incidental to other insurance benefits.
  • The law requirements do not apply with respect to a plan's providing of the following benefits if they are provided under a separate policy, certificate, or contract of insurance, or are otherwise not an integral part of the plan:
    • Limited scope dental or vision benefits;
    • Benefits for long-term care, nursing home care, home health care, community-based care, or any combination thereof; and
    • Such other similar, limited benefits as are specified in regulations.
  • The law requirements do not apply with respect to a plan's providing of the following benefits if:
    • They are provided under a separate policy, certificate, or contract of insurance;
    • There is no coordination between the provision of these benefits and any exclusion of benefits under any group health plan maintained by the same plan sponsor; and
    • The benefits are paid without regard to whether benefits are paid for the same event under any group health plan maintained by the same sponsor, the requirements would not apply to: coverage only for a specified disease or illness, or hospital indemnity or other fixed indemnity insurance.
  • The law requirements do not apply with respect to a plan's provision of the following benefits if they are provided under a separate policy, certificate, or contract of insurance:
    • Medicare supplemental health insurance;
    • Coverage supplemental to CHAMPUS; and
    • Similar supplemental coverage provided to coverage under a group health plan.

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