§ 36-6513. Application of act to certain group health benefit plans.

A.  Except as otherwise provided in this section, the Small Employer Health Insurance Reform Act shall apply to any group health benefit plan that provides coverage to two (2) or more eligible employees of a small employer in this state and to individual health benefits plans providing coverage for the eligible employees of a small employer which may include the employer when three (3) or more of such individual plans are sold to a small employer if any of the following conditions are met:

1.  Any portion of the premium or benefits is paid by or on behalf of the small employer;

2.  An eligible employee or dependent is reimbursed, whether through wage adjustments or otherwise, by or on behalf of the small employer for any portion of the premium; or

3.  The health benefit plan is treated by the employer or any of the eligible employees or dependents as part of a plan or program for the purposes of Section 162 or Section 106 of the United States Internal Revenue Code.

B.  1.  Except as provided in paragraph 2 of this subsection, for the purposes of the Small Employer Health Insurance Reform Act, carriers that are affiliated companies or that are eligible to file a consolidated tax return shall be treated as one carrier and any restrictions or limitations imposed by the Small Employer Health Insurance Reform Act shall apply as if all health benefit plans issued to small employers in this state by such affiliated carriers were issued by one carrier, unless on or before July 1, 1992, the respective affiliate carriers operated with separate books of business as insurers of health benefit plans in which event each such affiliate carrier shall be treated as a separate carrier.

2.  An affiliated carrier that is a health maintenance organization granted a certificate of authority by the Insurance Commissioner pursuant to the provisions of Sections 6901 through 6951 of Title 36 of the Oklahoma Statutes may be considered to be a separate carrier for the purposes of the Small Employer Health Insurance Reform Act.

C.  1.  Except as otherwise expressly set forth in this subsection, the provisions of the Small Employer Health Insurance Reform Act shall not apply to a health benefit plan issued to a small employer group through a bona fide association health plan.  Each bona fide association health plan that meets the requirements of this section shall be considered a large group for purposes of application of the Oklahoma Insurance Code.  For purposes of this subsection, a "bona fide association health plan" means a health benefit plan that:

a.is sponsored by a bona fide association as defined in Section 6512 of this title,

b.is delivered or issued for delivery to a bona fide association in a form that meets the requirements of Section 4502 of this title, and

c.satisfies all of the following:

(1)the initial premium rate for small employers in the bona fide association health plan shall be subject to the restrictions regarding premium rates contained in Section 6515 of this title,

(2)the association shall not discriminate in membership requirements based on actual or expected health status of individual enrollees or prospective enrollees,

(3)small employer groups that have two (2) or more eligible employees and that meet the membership requirements for the association are not excluded from the association health plan, and

(4)except as provided in paragraph 2 of this subsection, the association health plan maintains an eighty percent (80%) retention rate.

2.  The eighty percent (80%) retention rate specified in division (4) of subparagraph c of paragraph 1 of this subsection shall not include employer groups that:

a.go out of business, whether through merger, acquisition or any other reason,

b.no longer meet eligibility requirements for membership in the association,

c.no longer meet participation requirements for employers that are set forth in the plan documents, or

d.fail to pay premiums.

3.  A bona fide association health plan that fails to maintain the eighty percent (80%) retention rate during any year may have twelve months to correct the retention level before being required to become subject to the requirements of the Small Employer Health Insurance Reform Act.

4.  A bona fide association health plan may not require a contract under this subsection between the bona fide association health plan and the member to be effective for a period of longer than two (2) years.  This provision shall not be construed to prevent a contract from being extended for additional two-year periods or preventing the member from voluntarily electing a contract period of longer than two (2) years.

5.  Each bona fide association health plan shall be available to be marketed and sold by all licensed agents and brokers of the health carrier, at the health carrier's standard commission and/or fee schedule for the calendar year.

Added by Laws 1992, c. 329, § 3, eff. Sept. 1, 1992.  Amended by Laws 1994, c. 211, § 3, eff. July 1, 1994; Laws 1999, c. 360, § 1, eff. July 1, 1999; Laws 2000, c. 171, § 3, eff. July 1, 2000; Laws 2012, c. 151, § 2, eff. Nov. 1, 2012.