42 U.S.C. § 300gg–2: Guaranteed renewability…

Summary

Health insurers must renew or keep in force health plans they sell in the individual or group market if the person or employer asks. An insurer can refuse to renew only for specific reasons: the premium wasn’t paid, the person or employer committed fraud or lied, a group broke important rules about participation or employer contributions, the insurer is leaving that market, there are no enrollees left who live or work in the plan’s service area for a network plan, or an employer’s membership in a bona fide association that made the coverage available ends (but that kind of ending must be done the same way for everyone and not because of anyone’s health). If an insurer stops offering one type of plan, it must give at least 90 days’ notice to affected people and employers, offer other plans it sells in that market, and treat everyone the same without using health status or past claims to choose who loses coverage. If the insurer stops all coverage in a market or a State, it must give at least 180 days’ notice to the State and to enrollees, stop selling and renewing all plans in that market, and cannot come back to that market for 5 years. At renewal, insurers may change plan terms for large groups, and for small groups if state law allows and the changes are applied uniformly. For association-only plans, “plan sponsor” also means the employer member.

Title 42, §300gg–2

The Public Health and Welfare, Source: USLM XML via OLRC

(a)In general

Except as provided in this section, if a health insurance issuer offers health insurance coverage in the individual or group market, the issuer must renew or continue in force such coverage at the option of the plan sponsor or the individual, as applicable.

(b)General exceptions

A health insurance issuer may nonrenew or discontinue health insurance coverage offered in connection with a health insurance coverage offered in the group or individual market based only on one or more of the following:

(1)Nonpayment of premiums

The plan sponsor, or individual, as applicable, has failed to pay premiums or contributions in accordance with the terms of the health insurance coverage or the issuer has not received timely premium payments.

(2)Fraud

The plan sponsor, or individual, as applicable, has performed an act or practice that constitutes fraud or made an intentional misrepresentation of material fact under the terms of the coverage.

(3)Violation of participation or contribution rates

In the case of a group health plan, the plan sponsor has failed to comply with a material plan provision relating to employer contribution or group participation rules, pursuant to applicable State law.

(4)Termination of coverage

The issuer is ceasing to offer coverage in such market in accordance with subsection (c) and applicable State law.

(5)Movement outside service area

In the case of a health insurance issuer that offers health insurance coverage in the market through a network plan, there is no longer any enrollee in connection with such plan who lives, resides, or works in the service area of the issuer (or in the area for which the issuer is authorized to do business) and, in the case of the small group market, the issuer would deny enrollment with respect to such plan under section 2711(c)(1)(A).

(6)Association membership ceases

In the case of health insurance coverage that is made available in the small or large group market (as the case may be) only through one or more bona fide associations, the membership of an employer in the association (on the basis of which the coverage is provided) ceases but only if such coverage is terminated under this paragraph uniformly without regard to any health status-related factor relating to any covered individual.

(c)Requirements for uniform termination of coverage

(1)Particular type of coverage not offered

In any case in which an issuer decides to discontinue offering a particular type of group or individual health insurance coverage, coverage of such type may be discontinued by the issuer in accordance with applicable State law in such market only if—

(A)the issuer provides notice to each plan sponsor or individual, as applicable, provided coverage of this type in such market (and participants and beneficiaries covered under such coverage) of such discontinuation at least 90 days prior to the date of the discontinuation of such coverage;

(B)the issuer offers to each plan sponsor or individual, as applicable, provided coverage of this type in such market, the option to purchase all (or, in the case of the large group market, any) other health insurance coverage currently being offered by the issuer to a group health plan or individual health insurance coverage in such market; and

(C)in exercising the option to discontinue coverage of this type and in offering the option of coverage under subparagraph (B), the issuer acts uniformly without regard to the claims experience of those sponsors or individuals, as applicable, or any health status-related factor relating to any participants or beneficiaries covered or new participants or beneficiaries who may become eligible for such coverage.

(2)Discontinuance of all coverage

(A)In general

In any case in which a health insurance issuer elects to discontinue offering all health insurance coverage in the individual or group market, or all markets, in a State, health insurance coverage may be discontinued by the issuer only in accordance with applicable State law and if—

(i)the issuer provides notice to the applicable State authority and to each plan sponsor or individual, as applicable, (and participants and beneficiaries covered under such coverage) of such discontinuation at least 180 days prior to the date of the discontinuation of such coverage; and

(ii)all health insurance issued or delivered for issuance in the State in such market (or markets) are discontinued and coverage under such health insurance coverage in such market (or markets) is not renewed.

(B)Prohibition on market reentry

In the case of a discontinuation under subparagraph (A) in a market, the issuer may not provide for the issuance of any health insurance coverage in the market and State involved during the 5-year period beginning on the date of the discontinuation of the last health insurance coverage not so renewed.

(d)Exception for uniform modification of coverage

At the time of coverage renewal, a health insurance issuer may modify the health insurance coverage for a product offered to a group health plan—

(1)in the large group market; or

(2)in the small group market if, for coverage that is available in such market other than only through one or more bona fide associations, such modification is consistent with State law and effective on a uniform basis among group health plans with that product.

(e)Application to coverage offered only through associations

In applying this section in the case of health insurance coverage that is made available by a health insurance issuer in the small or large group market to employers only through one or more associations, a reference to “plan sponsor” is deemed, with respect to coverage provided to an employer member of the association, to include a reference to such employer.

Notes & Related Subsidiaries

Editorial Notes

References in Text

section 2711, referred to in subsec. (b)(5), is a reference to section 2711 of act

July 1, 1944. section 2711, which was classified to section 300gg–11 of this title, was renumbered section 2731 and amended and transferred by Pub. L. 111–148, title I, §§ 1001(3), 1563(c)(8), formerly § 1562(c)(8), title X, § 10107(b)(1), Mar. 23, 2010, 124 Stat. 130, 266, 911, to the end of section 2702 of act

July 1, 1944, as added by Pub. L. 111–148, title I, § 1201(4), Mar. 23, 2010, 124 Stat. 156, and classified to section 300gg–1 of this title. A new section 2711 of act

July 1, 1944, related to no lifetime or annual limits, was added by Pub. L. 111–148, title I, § 1001(5), Mar. 23, 2010, 124 Stat. 131, effective for plan years beginning on or after the date that is 6 months after Mar. 23, 2010, and is classified to section 300gg–11 of this title. Codification The text of section 300gg–12 of this title, which was amended and transferred to subsecs. (b) to (e) of this section by Pub. L. 111–148, § 1563(c)(9), formerly § 1562(c)(9), as renumbered by Pub. L. 111–148, § 10107(b)(1), was based on act

July 1, 1944, ch. 373, title XXVII, § 2732, formerly § 2712, as added Pub. L. 104–191, title I, § 102(a), Aug. 21, 1996, 110 Stat. 1964; renumbered § 2732, Pub. L. 111–148, title I, § 1001(3), Mar. 23, 2010, 124 Stat. 130.

Prior Provisions

A prior section 2703 of act July 1, 1944, was successively renumbered by subsequent acts and transferred, see section 238b of this title.

Amendments

2010—Pub. L. 111–148, § 1563(c)(9), formerly § 1562(c)(9), as renumbered by Pub. L. 111–148, § 10107(b)(1), transferred section 300gg–12 of this title to the end of this section after amending it by striking out the section catchline “Guaranteed renewability of coverage for employers in group market”, by striking subsec. (a) which required a health insurance issuer offering coverage in connection with a group health plan to renew such coverage at the option of the plan sponsor, by amending subsec. (b) by substituting “health insurance coverage offered in the group or individual market” for “group health plan in the small or large group market” in introductory provisions, inserting “, or individual, as applicable,” after “plan sponsor” in pars. (1) and (2), adding par. (3), and striking out former par. (3) which related to violation of participation or contribution rules, and by amending subsec. (c) by substituting “group or individual health insurance coverage” for “group health insurance coverage offered in the small or large group market” in introductory provisions of par. (1), inserting “or individual, as applicable,” after “plan sponsor” in par. (1)(A) and (B), inserting “or individual health insurance coverage” in par. (1)(B), inserting “or individuals, as applicable,” after “those sponsors” in par. (1)(C), substituting “individual or group market, or all markets,” for “small group market or the large group market, or both markets,” in introductory provisions of par. (2)(A), and inserting “or individual, as applicable,” after “plan sponsor” in par. (2)(A)(i). Amendment inserting “or individual health insurance coverage” in subsec. (c)(1)(B) was executed by making the insertion after “group health plan” as the probable intent of Congress, notwithstanding that the directory language did not specify where in subsec. (c)(1)(B) to make the insertion.

Statutory Notes and Related Subsidiaries

Effective Date

Section effective for plan years beginning on or after Jan. 1, 2014, see section 1255 of Pub. L. 111–148, set out as a note under section 300gg of this title.

§300gg–2 Guaranteed Renewability of Coverage