§ 27-50-6 - Renewability of coverage. - Rhode Island Statutes

SECTION 27-50-6

   § 27-50-6  Renewability of coverage. –(a) A health benefit plan subject to this chapter is renewable with respect toall eligible employees or dependents, at the option of the small employer,except in any of the following cases:

   (1) The plan sponsor has failed to pay premiums orcontributions in accordance with the terms of the health benefit plan or thecarrier has not received timely premium payments;

   (2) The plan sponsor or, with respect to coverage ofindividual insured under the health benefit plan, the insured or the insured'srepresentative has performed an act or practice that constitutes fraud or madean intentional misrepresentation of material fact under the terms of coverage;

   (3) Noncompliance with the carrier's minimum participationrequirements;

   (4) Noncompliance with the carrier's employer contributionrequirements;

   (5) The small employer carrier elects to discontinue offeringall of its health benefit plans delivered or issued for delivery to smallemployers in this state if the carrier:

   (i) Provides advance notice of its decision under thisparagraph to the commissioner in each state in which it is licensed; and

   (ii) Provides notice of the decision to:

   (A) All affected small employers and enrollees and theirdependents; and

   (B) The insurance commissioner in each state in which anaffected insured individual is known to reside at least one hundred and eighty(180) days prior to the nonrenewal of any health benefit plans by the carrier,provided the notice to the commissioner under this subparagraph is sent atleast three (3) working days prior to the date the notice is sent to theaffected small employers and enrollees and their dependents;

   (6) The director:

   (i) Finds that the continuation of the coverage would not bein the best interests of the policyholders or certificate holders or wouldimpair the carrier's ability to meet its contractual obligations; and

   (ii) Assists affected small employers in finding replacementcoverage;

   (7) The small employer carrier decides to discontinueoffering a particular type of health benefit plan in the state's small employermarket if the carrier:

   (i) Provides notice of the decision not to renew coverage atleast ninety (90) days prior to the nonrenewal of any health benefit plans toall affected small employers and enrollees and their dependents;

   (ii) Offers to each small employer issued a particular typeof health benefit plan the option to purchase all other health benefit planscurrently being offered by the carrier to small employers in the state; and

   (iii) In exercising this option to discontinue a particulartype of health benefit plan and in offering the option of coverage pursuant toparagraph (7)(ii) of this subsection acts uniformly without regard to theclaims experience of those small employers or any health status-related factorrelating to any enrollee or dependent of an enrollee or enrollees and theirdependents covered or new enrollees and their dependents who may becomeeligible for coverage;

   (8) In the case of health benefit plans that are madeavailable in the small group market through a network plan, there is no longeran employee of the small employer living, working or residing within thecarrier's established geographic service area and the carrier would denyenrollment in the plan pursuant to § 27-50-7(e)(1)(ii); or

   (9) In the case of a health benefit plan that is madeavailable in the small employer market only through one or more bona fideassociations, the membership of an employer in the bona fide association, onthe basis of which the coverage is provided, ceases, but only if the coverageis terminated under this paragraph uniformly without regard to any healthstatus-related factor relating to any covered individual.

   (b) A small employer carrier that elects not to renew healthbenefit plan coverage pursuant to subdivision (a)(2) of this section because ofthe small employer's fraud or intentional misrepresentation of material factunder the terms of coverage may choose not to issue a health benefit plan tothat small employer for one year after the date of nonrenewal.

   (2) This subsection shall not be construed to affect therequirements of § 27-50-7 as to the obligations of other small employercarriers to issue any health benefit plan to the small employer.

   (c) A small employer carrier that elects to discontinueoffering health benefit plans under subdivision (a)(5) of this section isprohibited from writing new business in the small employer market in this statefor a period of five (5) years beginning on the date the carrier ceasedoffering new coverage in this state.

   (2) In the case of a small employer carrier that ceasesoffering new coverage in this state pursuant to subdivision (a)(5) of thissection, the small employer carrier, as determined by the director, may renewits existing business in the small employer market in the state or may berequired to nonrenew all of its existing business in the small employer marketin the state.

   (d) A small employer carrier offering coverage through anetwork plan is not required to offer coverage or accept applications pursuantto subsection (a) or (b) of this section in the case of the following:

   (1) To an eligible person who no longer resides, lives, orworks in the service area, or in an area for which the carrier is authorized todo business, but only if coverage is terminated under this subdivisionuniformly without regard to any health status-related factor of coveredindividuals; or

   (2) To a small employer that no longer has any enrollee inconnection with the plan who lives, resides, or works in the service area ofthe carrier, or the area for which the carrier is authorized to do business.

   (e) At the time of coverage renewal, a small employer carriermay modify the health insurance coverage for a product offered to a grouphealth plan if, for coverage that is available in the small group market otherthan only through one or more bona fide associations, such modification isconsistent with otherwise applicable law and effective on a uniform basis amonggroup health plans with that product.