NU Online News Service, Nov. 4, 2004, 4:10 p.m. EST
Texas insurance regulators want health carriers in their state to do a better job of applying the same underwriting rules to small employers and very small employers.[@@]
State-regulated small group carriers can require all of the eligible employees in a 2-employee group to participate in a small group plan, but, in most other cases, carriers must treat the smallest small groups as well as they treat larger small groups, regulators say.
Affected carriers must “take immediate action to correct any noncompliant practices, procedures, forms and rates to ensure compliance and avoid an enforcement action,” according to Kimberly Stokes, the senior associate commissioner for life, health and licensing at the Texas Department of Insurance.
Stokes discusses small group underwriting and pricing rules in Texas Insurance Commissioner’s Bulletin Number B-0043-04.
Stokes cites reports of problems with medical questionnaires, issuance of coverage to small employer health coalitions and small group guaranteed renewability requirements.
Separately, Stokes reviews reports of confusion about state coverage continuation rules for group health plans of all sizes.
- Questionnaires: Stokes notes that carriers let some of the larger small employers fill out general health information questionnaires but require all employees at the smallest employers to fill out individual medical questionnaires.
“The law does not permit a carrier to use different applications for different-size small employer groups,” Stokes writes.
Similarly, efforts to offer composite rate options or other special rate options to larger small groups are out-of-bounds, Stokes writes.