Group Health Classification

PURPOSE: This rule implements the provisions of sections 375.786 (unauthorized insurers), 375.791.2 (foreign insurers), 375.014 (agent licensing), 375.071 (broker licensing), 376.405 (group insurance form filing and approval) and 376.421, RSMo (authorized group insurance), defines certain underwriting and rating practices as prohibited pursuant to section 375.936, RSMo (unfair trade practices) and ensures that group health insurance coverages solicited and sold in the state conform to applicable Missouri requirements. (1) No health insurance of any kind may be solicited or sold, or both, to an employer, union or similar organizational unit located in Missouri unless the insurer for which it is being solicited or sold, or both, has a valid certificate of authority in accordance with the requirements of sections 375.786 and 375.791.2, RSMo. (2) No health insurance of any kind may be solicited or sold, or both, to an employer, union or similar organizational unit located in Missouri unless the person or entity making these solicitations or sales, or both, is a duly licensed insurance producer in accordance with the requirements of sections 375.014 and 375.071, RSMo and holds a current and valid appointment with the insurer for which these solicitations or sales, or both, are made. (3) Section 376.421.1, RSMo defines those entities eligible for group health insurance issued in Missouri. Section 376.421.2, RSMo applies to group coverages offered or provided in Missouri other than specifically authorized in section 376.421.1, RSMo. Individual evidence of insurability may be required as to both section 376.421.1 and 376.421.2, RSMo groups and these groups may exclude or limit coverage as to any individual as to whom evidence of insurability is unsatisfactory. (4) Group policies issued to a multiple employer or union trust in Missouri or any other state as described in section 376.421.1(4), RSMo under which coverages are solicited and sold to employer, union or other organizational units located in Missouri shall be subject to the following requirements of this section: (A) The following practices based solely on individual health conditions, individual claims experience or deterioration of health shall be deemed an unfair discrimination in violation of section 375.936(11)(b), RSMo: 1. Any adjustment of premium contribution applicable to an individual within a unit of the group; 2. Any requirement that an individual(s) within a unit of the group must be reinstated or reunderwritten as a condition of continued eligibility in the group; and 3. The termination of eligibility of any individual within a unit of the group; (B) Any entity issuing a policy to a trust to provide coverage to multiple employers, unions or similar organizational units, as to these employers, unions or similar organizational units located in Missouri, shall be subject to the following disclosure requirements: 1. All solicitation or sales materials used at point of solicitation; the group policy and other plan documents, if any, issued to the employer, union or similar organizational unit; and the certificates or other evidence of coverage delivered to covered members must disclose, in terms sufficiently clear to put a reasonably prudent person on notice, the following matters: A. Whether tier or different rate levels, different trusts, different pools or any other similar mechanisms have been established for the purpose of effecting different premium rates applicable to an individual unit covered by the group policy and, if so, the frequency within which a unit may be reclassified for a different rate and the formula or amount by which these rate level classifications differ; B. Whether renewal rates will be calculated on the basis of experience within the entire group or on the basis of experience as to individual units or on a combination of both; C. Whether and to what extent individual units within the group can be cancelled or nonrenewed solely on the basis of deterioration of health of one (1) or more covered members within the unit; and D. The period of time in advance of the premium due date within which notification is provided as to any premium rate change applicable to the policyholder or any individual unit to which the change applies; and 2. Failure to provide adequate disclosure in accordance with this paragraph shall be deemed an unfair trade practice in violation of section 375.936(6), RSMo. (C) All these coverages solicited and sold to employers, unions or similar organizational units located in Missouri shall conform in all respects to applicable requirements of Missouri law. (5) This rule supersedes the previous version of 20 CSR 4002.090 which was effective January 1, 1989. Sections (1)–(3) and subsection (4)(A) of this new rule shall take effect on September 15, 1989. Subsections (4)(B) and (C) of this rule shall take effect and apply to all solicitations or sales, or both, commencing on and after December 14, 1989. AUTHORITY: section 374.045, RSMo 2000.* This rule was previously filed as 4 CSR 190-14.130. Original rule filed July 14, 1988, effective Jan. 1, 1989. Rescinded and readopted: Filed June 6, 1989, effective Sept. 15, 1989. Amended: Filed July 12, 2002, effective Jan. 30, 2003. *Original authority: 374.045, RSMo 1967, amended 1993, 1995.