§ 58-68-40. Guaranteed availability of coverage for employers in the small group market.
Subpart 2. Health InsuranceAvailability and Renewability.
§ 58‑68‑40. Guaranteed availability of coverage for employers in the small group market.
(a) Issuance ofCoverage in the Small Group Market.
(1) In general. Subjectto subsections (c) through (f) of this section, each health insurer that offershealth insurance coverage in the small group market in this State:
a. Must accept everysmall employer that applies for the coverage; and
b. Must accept forenrollment under the coverage every eligible individual who applies forenrollment during the period in which the individual first becomes eligible toenroll under the terms of the group health insurance plan and shall not placeany restriction that is inconsistent with G.S. 58‑68‑35 on aneligible individual being a participant or beneficiary.
(2) Eligible individualdefined. For the purposes of this section, "eligible individual"means, with respect to a health insurer that offers health insurance coverageto a small employer in the small group market, such an individual in relationto the employer as shall be determined:
a. In accordance withthe terms of the plan,
b. As provided by thehealth insurer under rules of the health insurer that are uniformly applicablein this State to small employers in the small group market, and
c. In accordance withall applicable State laws governing the health insurer and the market.
(b) Special Rules forNetwork Plans.
(1) In general. In thecase of a health insurer that offers health insurance coverage in the smallgroup market through a network plan, the health insurer may:
a. Limit the employersthat may apply for coverage to those with eligible individuals who live, work,or reside in the service area for the network plan; and
b. Within the servicearea of the network plan, deny coverage to the employers if the health insurerhas demonstrated to the Commissioner that: (i) it will not have the capacity todeliver services adequately to enrollees of any additional groups because ofits obligations to existing group contract holders and enrollees, and (ii) itis applying this subdivision uniformly to all employers without regard to theclaims experience of those employers and their employees (and their dependents)or any health status‑related factor relating to the employees anddependents.
(2) 180‑daysuspension upon denial of coverage. A health insurer, upon denying healthinsurance coverage in any service area in accordance with sub‑subdivision(1)b. of this subsection, shall not offer coverage in the small group marketwithin the service area for a period of 180 days after the date the coverage isdenied.
(c) Application ofFinancial Capacity Limits.
(1) In general. Ahealth insurer may deny health insurance coverage in the small group market ifthe health insurer has demonstrated to the Commissioner that:
a. It does not have thefinancial reserves necessary to underwrite additional coverage; and
b. It is applying thissubdivision uniformly to all employers in the small group market in the Stateconsistent with this Chapter and without regard to the claims experience ofthose employers and their employees (and their dependents) or any health status‑relatedfactor relating to the employees and dependents.
(2) 180‑daysuspension upon denial of coverage. A health insurer upon denying healthinsurance coverage in accordance with subdivision (1) of this subsection shallnot offer coverage in the small group market in the State for a period of 180days after the date the coverage is denied or until the health insurer hasdemonstrated to the Commissioner that the health insurer has sufficientfinancial reserves to underwrite additional coverage, whichever is later. TheCommissioner may apply this subsection on a service‑area‑specificbasis.
(d) Exception to Requirementfor Failure to Meet Certain Minimum Participation or Contribution Rules.
(1) In general. Subsection(a) of this section does not preclude a health insurer from establishingemployer contribution rules or group participation rules for the offering ofhealth insurance coverage in connection with a group health insurance plan inthe small group market, as allowed under this Chapter.
(2) Rules defined. Forthe purposes of subdivision (1) of this subsection:
a. "Employercontribution rule" means a requirement relating to the minimum level oramount of employer contribution toward the premium for enrollment ofparticipants and beneficiaries; and
b. "Groupparticipation rule" means a requirement relating to the minimum number ofparticipants or beneficiaries that must be enrolled in relation to a specifiedpercentage or number of eligible individuals or employees of an employer.
(e) Exception forCoverage. Subsection (a) of this section does not apply to:
(1) Health insurancecoverage offered by a health insurer if the coverage is made available in thesmall group market only through one or more bona fide associations.
(2) A self‑employedindividual as defined in G.S. 58‑50‑110(21a), except as otherwiseprovided for the basic and standard health care plans or other plans under G.S.58‑50‑126 under the North Carolina Small Employer Group HealthCoverage Reform Act. (1997‑259, s. 1(c); 1999‑132, s. 4.6; 2006‑154, s.4.)