§ 58-68-45. Guaranteed renewability of coverage for employers in the group market. - North Carolina Statutes

§58‑68‑45.  Guaranteed renewability of coverage for employers in thegroup market.

(a)        In General. –Except as provided in this section, if a health insurer offers health insurancecoverage in the small or large group market, the health insurer must renew orcontinue in force the coverage at the option of the employer.

(b)        General Exceptions.– A health insurer may nonrenew or discontinue health insurance coverage in thesmall or large group market based only on one or more of the following:

(1)        Nonpayment ofpremiums. – The policyholder has failed to pay premiums or contributions inaccordance with the terms of the health insurance coverage or the healthinsurer has not received timely premium payments.

(2)        Fraud. – Thepolicyholder has performed an act or practice that constitutes fraud or made anintentional misrepresentation of material fact under the terms of the coverage.

(3)        Violation ofparticipation or contribution rules. – The policyholder has failed to complywith a material plan provision relating to employer contribution or groupparticipation rules, as permitted under G.S. 58‑68‑40(d) in thecase of the small group market or pursuant to this Chapter in the case of thelarge group market.

(4)        Termination ofcoverage. – The health insurer is ceasing to offer coverage in the market inaccordance with subsection (c) of this section and this Chapter.

(5)        Movement outsideservice area. – In the case of a health insurer that offers health insurancecoverage in the market through a network plan, there is no longer any enrolleein connection with the network plan who lives, resides, or works in the servicearea of the health insurer or in the area for which the health insurer isauthorized to do business and, in the case of the small group market, the healthinsurer would deny enrollment with respect to the network plan under G.S. 58‑68‑40(c)(1)a.

(6)        Associationmembership ceases. – In the case of health insurance coverage that is madeavailable in the small or large group market only through one or more bona fideassociations, the membership of an employer in the association, on the basis ofwhich the coverage is provided, ceases but only if the coverage is terminatedunder this subdivision uniformly without regard to any health status‑relatedfactor relating to any covered individual.

(c)        Requirements forUniform Termination of Coverage. –

(1)        Particular type ofcoverage not offered. – In any case in which a health insurer decides todiscontinue offering a particular type of group health insurance coverageoffered in the small or large group market, coverage of the type may bediscontinued by the health insurer in accordance with this Chapter in themarket only if:

a.         The health insurerprovides notice to each policyholder provided coverage of this type in themarket and to the participants and beneficiaries covered under the coverage ofthe discontinuation at least 90 days before the date of the discontinuation ofthe coverage;

b.         The health insureroffers to each policyholder provided coverage of this type in the market theoption to purchase all, or in the case of the large group market, any otherhealth insurance coverage currently being offered by the health insurer to agroup health insurance plan in the market; and

c.         In exercising theoption to discontinue coverage of this type and in offering the option ofcoverage under sub‑subdivision b. of this subdivision, the health insureracts uniformly without regard to the claims experience of those sponsors or anyhealth status‑related factor relating to any participants orbeneficiaries covered or new participants or beneficiaries who may becomeeligible for the coverage.

(2)        Discontinuance ofall coverage. –

a.         In general. – In anycase in which a health insurer elects to discontinue offering all health insurancecoverage in the small group market or the large group market, or both markets,in this State, health insurance coverage may be discontinued by the healthinsurer only in accordance with this Chapter and if: (i) the health insurerprovides notice to the Commissioner and to each policyholder and to theparticipants and beneficiaries covered under the coverage of thediscontinuation at least 180 days before the date of the discontinuation of thecoverage; and (ii) all health insurance issued or delivered for issuance inthis State in the market or markets are discontinued and coverage under thehealth insurance coverage in the market or markets is not renewed.

b.         Prohibition onmarket reentry. – In the case of a discontinuation under sub‑subdivisiona. of this subdivision in a market, the health insurer shall not provide forthe issuance of any health insurance coverage in that market in this Stateduring the five‑year period beginning on the date of the discontinuationof the last health insurance coverage not so renewed.

(d)        Exception forUniform Modification of Coverage. – At the time of coverage renewal, a healthinsurer may modify the health insurance coverage for a product offered to agroup health insurance plan:

(1)        In the large groupmarket; or

(2)        In the small groupmarket if, for coverage that is available in the market other than only throughone or more bona fide associations, the modification is consistent with thisChapter and effective on a uniform basis among group health insurance plans withthat product.

(e)        Application toCoverage Offered Only Through Associations. – In applying this section in thecase of health insurance coverage that is made available by a health insurer inthe small or large group market to employers only through one or moreassociations, a reference to "policyholder" is deemed, with respectto coverage provided to an employer member of the association, to include areference to the employer. (1997‑259, s. 1(c); 1997‑456, s. 42.)