§ 27-50-12 - Standards to assure fair marketing. - Rhode Island Statutes

SECTION 27-50-12

   § 27-50-12  Standards to assure fairmarketing. – (a) Each small employer carrier shall actively market and offer all healthbenefit plans sold by the carrier to eligible small employers in the state.

   (b) Except as provided in subdivision (2) of this subsection,no small employer carrier or producer shall, directly or indirectly, engage inthe following activities:

   (i) Encouraging or directing small employers to refrain fromfiling an application for coverage with the small employer carrier because ofany health status-related factor, age, gender, industry, occupation, orgeographic location of the small employer; or

   (ii) Encouraging or directing small employers to seekcoverage from another carrier because of any health status-related factor, age,gender, industry, occupation, or geographic location of the small employer.

   (2) The provisions of subdivision (1) of this subsection donot apply with respect to information provided by a small employer carrier orproducer to a small employer regarding the established geographic service areaor a restricted network provision of a small employer carrier.

   (c) Except as provided in subdivision (2) of this subsection,no small employer carrier shall, directly or indirectly, enter into anycontract, agreement or arrangement with a producer that provides for or resultsin the compensation paid to a producer for the sale of a health benefit plan tobe varied because of any initial or renewal, industry, occupation, orgeographic location of the small employer.

   (2) Subdivision (1) of this subsection does not apply withrespect to a compensation arrangement that provides compensation to a produceron the basis of percentage of premium, provided that the percentage shall notvary because of any health status-related factor, industry, occupation, orgeographic area of the small employer.

   (d) A small employer carrier shall provide reasonablecompensation, as provided under the plan of operation of the program, to aproducer, if any, for the sale of any health benefit plan subject to §27-50-10.

   (e) No small employer carrier may terminate, fail to renew,or limit its contract or agreement of representation with a producer for anyreason related to health status-related factor, occupation, or geographiclocation of the small employers placed by the producer with the small employercarrier.

   (f) No small employer carrier or producer shall induce orencourage a small employer to separate or exclude an employee or dependent fromhealth coverage or benefits provided in connection with the employee'semployment.

   (g) Denial by a small employer carrier of an application forcoverage from a small employer shall be in writing and shall state the reasonor reasons for the denial.

   (h) The director may establish regulations setting forthadditional standards to provide for the fair marketing and broad availabilityof health benefit plans to small employers in this state.

   (i) A violation of this section by a small employer carrieror a producer is an unfair trade practice under chapter 13 of title 6.

   (2) If a small employer carrier enters into a contract,agreement, or other arrangement with a third-party administrator to provideadministrative, marketing, or other services related to the offering of healthbenefit plans to small employers in this state, the third-party administratoris subject to this section as if it were a small employer carrier.