40-2209p. Same; required coverage for all applying small employers; medical service enrollment, limitations; denial of coverage, when; definitions.
40-2209p
40-2209p. Same; required coverage for all applyingsmall employers; medical service enrollment, limitations; denial of coverage,when; definitions.(a) On and after July 1, 1997, and subject to any exclusionsset out in subsections (b) through (e), each accident and sickness insurer thatoffers or renews policies providing hospital, medical or surgical expensebenefits to a small employer must: (1) Accept every small employer that appliesfor such coverage; and (2) accept for enrollment all eligible employees ordependents under such policy who apply for enrollment during the period inwhich the eligible employee or dependent first becomes eligible to enroll underthe terms of the policy.
(b) (1) In the case of an accident and health insurer that offers a policyproviding hospital, medical or surgical expense benefits to a small employerthrough a medical service enrollment area the accident and health insurer may:
(A) Limit the small employers that may apply for such coverage to those witheligible employees or dependents who live, work or reside in the medicalservice enrollment area for such policy; and
(B) within the medical service enrollment area of such policy, deny coverageto such small employer if the accident and sickness insurer has demonstrated tothe commissioner that: (i) It will not have the capacity to deliver servicesadequately to small employees and dependents of any additional small employersbecause of its obligations to existing small employer group policyholders orcertificateholders and to eligible employees and dependents; and (ii) it willapplythis paragraph uniformly to all small employers without regard to the claimsexperience of those small employers and their employees and dependents andwithout regard to the health status factors of any employees or dependents.
(2) An accident and sickness insurer which denies coverage to a smallemployer under any policy providing hospital, medical or surgical expensebenefits in any medical service enrollment area in accordance with subsection(b)(1)(B) may not offer such policies to small employers within such medicalservice enrollment area for a period of 180 days after coverage is denied.
(c) (1) An accident and sickness insurer may deny coverage to a smallemployer under a policy providing hospital, medical or surgical expensebenefits if the accident and sickness insurer has demonstrated to thecommissioner that:
(A) It does not have the financial reserves necessary to underwriteadditional coverage; and
(B) it is applying this paragraph uniformly to all small employers in thisstate without regard to the claims experience of the small employers and theiremployees and dependents and without regard to any health status factors of anyemployees or dependents.
(2) An accident and health insurer upon denying coverage to small employersunder policies providing hospital, medical or surgical expense benefits inaccordance with subsection (c)(1) may not offer any policies providinghospital, medical or surgical expense benefits to any small employer for aperiod of 180days after the date such policies are denied or until the accident and healthinsurer has demonstrated to the commissioner that it has sufficient financialreserves to underwrite additional coverage, whichever is later.
(d) The requirements of subsection (a) shall not be construed to preclude anaccident and health insurer from establishing employer contribution rules orgroup participation rules for the offering of policies providing hospital,medical or surgical expense benefits to small employers.
(e) The requirements of subsection (a) shall not apply to small employergroup policies offered by an accident and health insurer if such coverage ismade available only through one or more associations.
(f) As used in this subsection the following mean:
(1) "Dependent" means those persons as defined in subsection (k) of K.S.A.40-2209d and amendments thereto;
(2) "employee" means those persons as defined in subsection (1) of K.S.A.40-2209d and amendments thereto;
(3) "employer contribution rule" means a requirement relating to the minimumlevel or amount of employer contribution toward the premium for enrollment ofemployees and dependents;
(4) "group participation rule" means a requirement relating to the minimumnumber of employees and dependents that must be enrolled in relation to aspecified percentage or number of eligible employees or dependents;
(5) "health status related factors" means: (A) a physical or mental illnessmedical condition, (B) claims experience, (C) receipt of health care, (D)medical history, (E) genetic information, (F) evidence of insurabilityincluding conditions arising out of acts of domestic violence and (H)disability; and
(6) "small employer" means those employers as defined by subsection (z) ofK.S.A. 40-2209d and amendments thereto.
History: L. 1997, ch. 190, § 6; July 1.