635.02(3)
(3) "Class of business" means all or a distinct grouping of small employers determined in accordance with rules promulgated by the commissioner under
s. 635.05 (4).
635.02(3j)
(3j) "Established geographic service area" means a geographic area within which a small employer insurer provides coverage and that has been approved by the commissioner.
635.02(4m)
(4m) "Midpoint rate" means the arithmetic average of the base premium rate and the corresponding highest premium rate.
635.02(5)
(5) "New business premium rate" means the premium rate charged or offered to small employers with similar case characteristics in the same class of business for newly issued health insurance with the same or similar benefit design characteristics.
635.02(6)
(6) "Rating period" means the period, determined by a small employer insurer, during which a premium rate established by the small employer insurer remains in effect.
635.02(6m)
(6m) "Restricted network provision" means a provision of a health benefit plan that conditions the payment of benefits, in whole or in part, on obtaining services or articles from health care providers that have contracted with the small employer insurer to provide health care services or articles to covered individuals.
635.02(7)
(7) "Small employer" means, with respect to a calendar year and a plan year, an employer that employed an average of at least 2 but not more than 50 employees on business days during the preceding calendar year, or that is reasonably expected to employ an average of at least 2 but not more than 50 employees on business days during the current calendar year if the employer was not in existence during the preceding calendar year, and that employs at least 2 employees on the first day of the plan year.
635.02(8)
(8) "Small employer insurer" means an insurer that is authorized to do business in this state, in one or more lines of insurance that includes health insurance, and that offers group health benefit plans covering eligible employees of one or more small employers in this state, or that sells 3 or more individual health benefit plans to a small employer, covering eligible employees of the small employer. The term includes a health maintenance organization, as defined in
s. 609.01 (2), a preferred provider plan, as defined in
s. 609.01 (4), and an insurer operating as a cooperative association organized under
ss. 185.981 to
185.985, but does not include a limited service health organization, as defined in
s. 609.01 (3).
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.
635.11
635.11
Disclosure of rating factors and renewability provisions. 635.11(1m)(1m) Before the sale of a plan or policy subject to this chapter, a small employer insurer shall disclose to a small employer all of the following:
635.11(1m)(a)
(a) The small employer insurer's right to increase premium rates and the factors limiting the amount of increase.
635.11(1m)(b)
(b) The extent to which benefit design characteristics and case characteristics affect premium rates.
635.11(1m)(c)
(c) The extent to which rating factors and changes in benefit design characteristics and case characteristics affect changes in premium rates.
635.11(1m)(e)
(e) As part of the small employer insurer's solicitation and sales materials, the availability of the information under
par. (f).
635.11(1m)(f)
(f) Upon the request of the small employer, the following information:
635.11(1m)(f)1.
1. The provisions, if any, of the plan or policy relating to preexisting condition exclusions.
635.11(1m)(f)2.
2. The benefits and premiums available under all health insurance coverage offered by the small employer insurer for which the small employer is qualified.
635.11(2m)
(2m) Information required to be disclosed under this section shall be provided in a manner that is understandable to a small employer and shall be sufficient to reasonably inform a small employer of the small employer's rights and obligations under the health insurance coverage.
635.11(3m)
(3m) A small employer insurer is not required under this section to disclose information that is proprietary or trade secret information under applicable law.
635.11 History
History: 1991 a. 39,
250,
315;
1997 a. 27.
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 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;
1997 a. 27.
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.
635.18
635.18
Fair marketing standards. 635.18(1)
(1) Every small employer insurer shall actively market health benefit plan coverage to small employers in the state.
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 employees 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 employees or dependents.
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 employees 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 employee from health coverage or benefits provided in connection with the employee'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 chapter 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;
1997 a. 27.
635.19
635.19
Issuance of coverage in small group market. 635.19(1)(a)(a) Except as provided in
subs. (2) to
(6), a small employer insurer that offers a group health benefit plan in the small group market shall do all of the following:
635.19(1)(a)1.
1. Accept any small employer in the state that applies for such coverage.
635.19(1)(a)2.
2. Accept for enrollment under such coverage any eligible individual who applies for enrollment during the period in which the individual first becomes eligible to enroll under the terms of the group health benefit plan.
635.19(1)(b)
(b) For purposes of this section, whether an individual is an "eligible individual" in relation to a small employer shall be determined in accordance with all of the following:
635.19(1)(b)1.
1. The terms of the group health benefit plan under which the individual is applying for enrollment.
635.19(1)(b)2.
2. Rules of the small employer insurer offering the group health benefit plan under which the individual is applying for enrollment, which rules must apply uniformly in this state to small employers in the small group market.
635.19(1)(b)3.
3. All state laws that apply to small employer insurers and the small group market.
635.19(2)(a)(a) A small employer insurer that offers a group health benefit plan in the small group market through a network plan may do any of the following:
635.19(2)(a)1.
1. Limit the small employers that may apply for such coverage to those with eligible individuals who reside, live or work in the service area of the network plan.
635.19(2)(a)2.
2. Within the service area of the network plan, deny such coverage to small employers if the small employer insurer demonstrates to the commissioner all of the following:
635.19(2)(a)2.a.
a. That the insurer does not have the capacity to deliver services adequately to enrollees of any additional groups because of its obligations to existing group contract holders and enrollees.
635.19(2)(a)2.b.
b. That the insurer is applying this subdivision uniformly to all small employers without regard to the claims experience of those small employers or their employees or employees' dependents or any other health status-related factor of those employees or their dependents.
635.19(2)(b)
(b) A small employer insurer that denies coverage under
par. (a) 2. in any service area may not offer coverage in the small group market in that service area for 180 days after the date on which the coverage was denied.
635.19(3)(a)(a) A small employer insurer that offers a group health benefit plan in the small group market may deny small employers coverage under such a plan in the small group market if the small employer insurer demonstrates to the commissioner all of the following:
635.19(3)(a)1.
1. That the insurer does not have the financial reserves necessary to underwrite additional coverage.
635.19(3)(a)2.
2. That the insurer is applying this paragraph uniformly to all small employers in the small group market in the state in accordance with applicable state law and without regard to the claims experience of those small employers or their employees or employees' dependents or any other health status-related factor of those employees or their dependents.
635.19(3)(b)
(b) A small employer insurer that denies coverage under
par. (a) may not offer a group health benefit plan in the small group market in the state for 180 days after the date on which the coverage was denied or until the insurer demonstrates to the commissioner that the insurer has sufficient financial reserves to underwrite additional coverage, whichever is later.
635.19(4)
(4) Subsection (1) shall not be construed to preclude a small employer insurer from establishing, for the offering of a group health benefit plan in the small group market, any of the following:
635.19(4)(a)
(a) Rules or requirements relating to the minimum level or amount of small employer contribution toward the premium for the enrollment of participants and beneficiaries.
