635.05
635.05
Rate regulation. Notwithstanding
ch. 625, the commissioner shall promulgate rules:
635.05(1)
(1) Establishing restrictions on premium rates that a small employer insurer may charge a small employer such that the premium rates charged to small employers with similar case characteristics for the same or similar benefit design characteristics do not vary from the midpoint rate for those small employers by more than 35% of that midpoint rate.
635.05(2)
(2) Establishing restrictions on increases in premium rates that a small employer insurer may charge a small employer such that:
635.05(2)(a)
(a) The percentage increase in the premium rate for a new rating period does not exceed the sum of the following:
635.05(2)(a)1.
1. The percentage change in the new business premium rate measured from the first day of the prior rating period to the first day of the new rating period, or the percentage change in the base premium rate in the case of a class of business for which the small employer insurer is not issuing new policies.
635.05(2)(a)2.
2. An adjustment, not to exceed 15% per year, adjusted proportionally for rating periods of less than one year, for such rating factors as claim experience, health status and duration of coverage, determined in accordance with the small employer insurer's rate manual or rating procedures.
635.05(2)(a)3.
3. An adjustment for a change in case characteristics or in benefit design characteristics, determined in accordance with the small employer insurer's rate manual or rating procedures.
635.05(2)(b)
(b) The percentage increase in the premium rate for a new rating period for a policy issued before August 15, 1991, does not exceed the sum of
par. (a) 1. and
3., unless premium rates are in compliance with the rules promulgated under
sub. (1).
635.05(3)
(3) Requiring the premium rate of a policy issued before August 15, 1991, to comply with the rules promulgated under
sub. (1) no later than 3 years after August 15, 1991.
635.05(4)
(4) Defining the terms necessary for compliance with this section.
635.05(5)
(5) Ensuring that small employers are classified using objective criteria.
635.05(6)
(6) Ensuring that rating factors are applied objectively and consistently within a class of business.
635.05 History
History: 1991 a. 39,
250.
635.07
635.07
Contract termination and renewability. 635.07(1)
(1) Notwithstanding
s. 631.36 (2) to
(4m), a plan or policy subject to this subchapter may not be canceled by an insurer before the expiration of the agreed term, and shall be renewable to the employer and all employes and dependents eligible under the terms of the plan or policy at the expiration of the agreed term at the option of the small employer, except for any of the following reasons:
635.07(1)(b)
(b) Fraud or misrepresentation by the small employer, or, with respect to coverage for an insured individual, fraud or misrepresentation by the insured individual.
635.07(1)(c)
(c) Substantial breaches of contractual duties, conditions or warranties.
635.07(1)(d)
(d) The number of individuals covered under the plan or policy is less than the number required by the plan or policy.
635.07(1)(e)
(e) The small employer is no longer actively engaged in a business enterprise.
635.07(2)
(2) Notwithstanding
sub. (1), a small employer insurer may elect not to renew a health insurance plan or policy subject to this subchapter if the small employer insurer complies with all of the following:
635.07(2)(a)
(a) The small employer insurer ceases to renew all plans or policies subject to this subchapter that are issued to all other small employers in the same class of business.
635.07(2)(b)
(b) The small employer insurer provides notice to all affected small employers and to the commissioner in each state in which an affected insured individual resides not later than one year before termination of coverage.
635.07(2)(c)
(c) The small employer insurer does not establish a new class of business earlier than 5 years after the nonrenewal of the plans or policies.
635.07(2)(d)
(d) The small employer insurer does not transfer or otherwise provide coverage to a small employer from the nonrenewed class of business unless the small employer insurer offers to transfer or provide coverage to all affected small employers from the nonrenewed class of business without regard to case characteristics, claim experience, health status or duration of coverage.
635.07(3)
(3) This section does not apply to a plan or policy subject to this subchapter if the small employer insurer that issued the policy is in liquidation.
635.07 History
History: 1991 a. 39,
250;
1995 a. 289.
635.09
635.09
Prohibited denial of coverage. No small employer insurer may refuse to provide coverage for employes of a small employer solely on the basis of the occupation of the employes or the type of business in which the small employer is engaged.
635.09 History
History: 1991 a. 39,
250.
635.11
635.11
Disclosure of rating factors and renewability provisions. Before the sale of a plan or policy subject to this subchapter, a small employer insurer shall disclose to a small employer all of the following:
635.11(1)
(1) The small employer insurer's right to increase premium rates and the factors limiting the amount of increase.
635.11(2)
(2) The extent to which benefit design characteristics and case characteristics affect premium rates.
635.11(3)
(3) The extent to which rating factors and changes in benefit design characteristics and case characteristics affect changes in premium rates.
635.11(4)
(4) The small employer's renewability rights.
635.11 History
History: 1991 a. 39,
250,
315.
635.13
635.13 Annual certification of compliance. 635.13(1)(1)
Records. A small employer insurer shall maintain at its principal place of business complete and detailed records relating to its rating methods and practices and its renewal underwriting methods and practices, and shall make the records available to the commissioner and the small employer insurance board upon request.
635.13(2)
(2) Certification. A small employer insurer shall file with the commissioner on or before May 1 annually an actuarial opinion by a member of the American academy of actuaries certifying all of the following:
635.13(2)(a)
(a) That the small employer insurer is in compliance with the rate provisions of
s. 635.05.
635.13(2)(b)
(b) That the small employer insurer's rating methods are based on generally accepted and sound actuarial principles, policies and procedures.
635.13(2)(c)
(c) That the opinion is based on the actuary's examination of the small employer insurer's records and a review of the small employer insurer's actuarial assumptions and statistical methods used in setting rates and procedures used in implementing rating plans.
635.13 History
History: 1991 a. 39,
250.
635.15
635.15
Temporary suspension of rate regulation. The commissioner may suspend the operation of all or any part of
s. 635.05 with respect to one or more small employers for one or more rating periods upon the written request of a small employer insurer and a finding by the commissioner that the suspension is necessary in light of the financial condition of the small employer insurer or that the suspension would enhance the efficiency and fairness of the small employer health insurance market.
635.15 History
History: 1991 a. 39,
250.
635.17
635.17
Coverage requirements for small employer plans. 635.17(1)(1)
Underwriting, portability and preexisting conditions. 635.17(1)(a)(a) A health benefit plan subject to this subchapter may not deny, exclude or limit benefits for a covered individual for losses incurred more than 12 months after the effective date of the individual's coverage due to a preexisting condition. Such a health benefit plan may not define a preexisting condition more restrictively than any of the following:
635.17(1)(a)1.
1. A condition that would have caused an ordinarily prudent person to seek medical advice, diagnosis, care or treatment during the 6 months immediately preceding the effective date of coverage.
635.17(1)(a)2.
2. A condition for which medical advice, diagnosis, care or treatment was recommended or received during the 6 months immediately preceding the effective date of coverage.
635.17(1)(a)3.
3. A pregnancy existing on the effective date of coverage.
635.17(1)(b)1.1. A health benefit plan subject to this subchapter shall waive any period applicable to a preexisting condition exclusion or limitation period with respect to particular services for the period that an individual was previously covered by qualifying coverage that provided benefits with respect to such services, if the qualifying coverage was continuous to a date not more than 30 days before the effective date of the new coverage.
635.17(1)(b)2.
2. Subdivision 1. does not prohibit the application of a waiting period to all new enrollees under the health benefit plan; however, a waiting period may not be counted when determining whether the qualifying coverage was continuous to a date not more than 30 days before the effective date of the new coverage. For the purpose of
subd. 1., the new coverage shall be considered effective as of the date that it would be effective but for the waiting period.
635.17(1)(b)3.
3. Until June 1, 1993,
subd. 1. does not apply to a health benefit plan that is not a basic health benefit plan if the previous qualifying coverage was a basic health benefit plan.
635.17(2)
(2) Minimum participation of employes. 635.17(2)(a)(a) Except as provided in
par. (d), requirements used by a small employer insurer in determining whether to provide coverage to a small employer, including requirements for minimum participation of eligible employes and minimum employer contributions, shall be applied uniformly among all small employers that apply for or receive coverage from the small employer insurer and that have the same number of eligible employes.
635.17(2)(b)
(b) A small employer insurer may vary its minimum participation requirements and minimum employer contribution requirements only by the size of the small employer group.
635.17(2)(c)1.1. Except as provided in
subd. 2., in applying minimum participation requirements with respect to a small employer, a small employer insurer may not count eligible employes or their dependents who have other coverage that is qualifying coverage in determining whether the applicable percentage of participation is met.
635.17(2)(c)2.
2. If a small employer has 10 or fewer eligible employes, a small employer insurer may count eligible employes or their dependents who have coverage under another health benefit plan sponsored by that small employer in applying minimum participation requirements to determine whether the applicable percentage of participation is met.
635.17(2)(d)
(d) A small employer insurer may not increase a requirement for minimum employe participation or a requirement for minimum employer contribution that applies to a small employer after the small employer has been accepted for coverage.
635.17(3)(a)(a) If a small employer insurer offers coverage to a small employer, the small employer insurer shall offer coverage to all of the eligible employes of the small employer and their dependents. A small employer insurer may not offer coverage to only certain individuals in a small employer group or to only part of the group, except for an eligible employe who has not yet satisfied an applicable waiting period, if any.
635.17(3)(b)
(b) A small employer insurer may not modify a health benefit plan with respect to a small employer or an eligible employe or dependent, through riders, endorsements or otherwise, to restrict or exclude coverage for certain diseases or medical conditions otherwise covered by the health benefit plan.
635.17 History
History: 1991 a. 250;
1995 a. 289,
412.
635.18
635.18
Fair marketing standards. 635.18(1)(1) Every small employer insurer shall actively market health benefit plan coverage, including basic health benefit plans, to small employers in the state. If a small employer insurer denies coverage to a small employer under a health benefit plan that is not a basic health benefit plan on the basis of the health status or claims experience of the small employer or its eligible employes or their dependents, the small employer insurer shall offer the small employer the opportunity to purchase a basic health benefit plan.
635.18(2)(a)(a) Except as provided in
par. (b), a small employer insurer or an intermediary may not, directly or indirectly, do any of the following:
635.18(2)(a)1.
1. Discourage a small employer from applying, or direct a small employer not to apply, for coverage with the small employer insurer because of the health status, claims experience, industry, occupation or geographic location of the small employer.
635.18(2)(a)2.
2. Encourage or direct a small employer to seek coverage from another insurer because of the health status, claims experience, industry, occupation or geographic location of the small employer.
635.18(2)(b)
(b) Paragraph (a) does not prohibit a small employer insurer or an intermediary from providing a small employer with information about an established geographic service area or a restricted network provision of the small employer insurer.
635.18(3)(a)(a) Except as provided in
par. (b), a small employer insurer may not, directly or indirectly, enter into any contract, agreement or arrangement with an intermediary that provides for or results in compensation to an intermediary for the sale of a health benefit plan that varies according to the health status, claims experience, industry, occupation or geographic location of the small employer or eligible employes or dependents.
635.18(3)(b)
(b) Payment of compensation on the basis of percentage of premium is not a violation of
par. (a) if the percentage does not vary based on the health status, claims experience, industry, occupation or geographic area of the small employer or eligible employes or dependents.
635.18(3)(c)
(c) A small employer insurer shall provide reasonable compensation to an intermediary, if any, for the sale of a basic health benefit plan.
635.18(4)
(4) A small employer insurer may not terminate, fail to renew or limit its contract or agreement of representation with an intermediary for any reason related to the health status, claims experience, occupation or geographic location of the small employers or eligible employes or their dependents placed by the intermediary with the small employer insurer.
635.18(5)
(5) A small employer insurer or an intermediary may not induce or otherwise encourage a small employer to separate or otherwise exclude an employe from health coverage or benefits provided in connection with the employe's employment.
635.18(6)
(6) Denial by a small employer insurer of an application for coverage from a small employer shall be in writing and shall state the reason or reasons for the denial.
635.18(7)
(7) A 3rd-party administrator that enters into a contract, agreement or other arrangement with a small employer insurer to provide administrative, marketing or other services related to the offering of health benefit plans to small employers in this state is subject to this subchapter as if it were a small employer insurer.
635.18(8)
(8) The commissioner may by rule establish additional standards to provide for the fair marketing and broad availability of health benefit plans to small employers in this state.
635.18 History
History: 1991 a. 250,
315.
SMALL EMPLOYER HEALTH INSURANCE PLAN
635.20
635.20
Definitions. In this subchapter:
635.20(1)
(1) "Basic benefits" means the minimum benefits established by the plan board under
ss. 635.21 and
635.23 (1) (a), and includes all health insurance mandates to the extent determined by the plan board under
s. 635.23 (1) (b).
