2009 Iowa Code
Title 13 - Commerce
Subtitle 1 - Insurance and Related Regulation
CHAPTER 513B - SMALL GROUP HEALTH COVERAGE
513B.10 - AVAILABILITY OF COVERAGE.

        513B.10  AVAILABILITY OF COVERAGE.
         1. a.  A carrier or an organized delivery system that offers
      health insurance coverage in the small group market shall accept
      every small employer that applies for health insurance coverage and
      shall accept for enrollment under such coverage every eligible
      individual who applies for enrollment during the period in which the
      individual first becomes eligible to enroll under the terms of the
      health insurance coverage and shall not place any restriction which
      is inconsistent with eligibility rules established under this
      chapter.
         b.  A carrier or organized delivery system that offers health
      insurance coverage in the small group market through a network plan
      may do either of the following:
         (1)  Limit employers that may apply for such coverage to those
      with eligible individuals who live, work, or reside in the service
      area for such network plan.
         (2)  Deny such coverage to such employers within the service area
      of such plan if the carrier or organized delivery system has
      demonstrated to the applicable state authority both of the following:

         (a)  The carrier or organized delivery system will not have the
      capacity to deliver services adequately to enrollees of any
      additional groups because of its obligations to existing group
      contract holders and enrollees.
         (b)  The carrier or organized delivery system is applying this
      subparagraph uniformly to all employers without regard to the claims
      experience of those employers and their employees and their
      dependents, or any health status-related factor relating to such
      employees or dependents.
         c.  A carrier or organized delivery system, upon denying
      health insurance coverage in any service area pursuant to paragraph
      "b", subparagraph (2), shall not offer coverage in the small
      group market within such service area for a period of one hundred
      eighty days after the date such coverage is denied.
         d.  A carrier or organized delivery system may deny health
      insurance coverage in the small group market if the issuer has
      demonstrated to the commissioner or director of public health both of
      the following:
         (1)  The carrier or organized delivery system does not have the
      financial reserves necessary to underwrite additional coverage.
         (2)  The carrier or organized delivery system is applying the
      provisions of this paragraph uniformly to all employers in the small
      group market in this state consistent with state law and without
      regard to the claims experience of those employers and the employees
      and dependents of such employers, or any health status-related factor
      relating to such employees and their dependents.
         e.  A carrier or organized delivery system, upon denying
      health insurance coverage pursuant to paragraph "d", shall not
      offer coverage in connection with health insurance coverages in the
      small group market in this state for a period of one hundred eighty
      days after the date such coverage is denied or until the carrier or
      organized delivery system has demonstrated to the commissioner or
      director of public health that the carrier or organized delivery
      system has sufficient financial reserves to underwrite additional
      coverage, whichever is later.  The commissioner or director may
      provide for the application of this paragraph on a service
      area-specific basis.
         f.  Paragraph "a" shall not be construed to preclude a
      carrier or organized delivery system from establishing employer
      contribution rules or group participation rules for the offering of
      health insurance coverage in the small group market.
         2.  A carrier or organized delivery system, subject to subsection
      1, shall issue health insurance coverage to an eligible small
      employer that applies for the coverage and agrees to make the
      required premium payments and satisfy the other reasonable provisions
      of the health insurance coverage not inconsistent with this chapter.
      A carrier or organized delivery system is not required to issue
      health insurance coverage to a self-employed individual who is
      covered by, or is eligible for coverage under, health insurance
      coverage offered by an employer.
         3.  Health insurance coverage for small employers shall satisfy
      all of the following:
         a.  A carrier or organized delivery system offering group
      health insurance coverage, with respect to a participant or
      beneficiary, may impose a preexisting condition exclusion only as
      follows:
         (1)  The exclusion relates to a condition, whether physical or
      mental, regardless of the cause of the condition, for which medical
      advice, diagnosis, care, or treatment was recommended or received
      within the six-month period ending on the enrollment date.  However,
      genetic information shall not be treated as a condition under this
      subparagraph in the absence of a diagnosis of the condition related
      to such information.
         (2)  The exclusion extends for a period of not more than twelve
      months, or eighteen months in the case of a late enrollee, after the
      enrollment date.
         (3)  The period of any such preexisting condition exclusion is
      reduced by the aggregate of the periods of creditable coverage
      applicable to the participant or beneficiary as of the enrollment
      date.
         b.  A carrier or organized delivery system offering group
      health insurance coverage shall not impose any preexisting condition
      exclusion as follows:
         (1)  In the case of a child who is adopted or placed for adoption
      before attaining eighteen years of age and who, as of the last day of
      the thirty-day period beginning on the date of the adoption or
      placement for adoption, is covered under creditable coverage.  This
      subparagraph shall not apply to coverage before the date of such
      adoption or placement for adoption.
         (2)  In the case of an individual who, as of the last day of the
      thirty-day period beginning with the date of birth, is covered under
      creditable coverage.
         (3)  Relating to pregnancy as a preexisting condition.
         c.  A carrier or organized delivery system shall waive any
      waiting period applicable to a preexisting condition exclusion or
      limitation period with respect to particular services under health
      insurance coverage for the period of time an individual was covered
      by creditable coverage, provided that the creditable coverage was
      continuous to a date not more than sixty-three days prior to the
      effective date of the new coverage.  Any period that an individual is
      in a waiting period for any coverage under group health insurance
      coverage, or is in an affiliation period, shall not be taken into
      account in determining the period of continuous coverage.  A health
      maintenance organization that does not use preexisting condition
      limitations in any of its health insurance coverage may impose an
      affiliation period.  For purposes of this section, "affiliation
      period" means a period of time not to exceed sixty days for new
      entrants and not to exceed ninety days for late enrollees during
      which no premium shall be collected and coverage issued is not
      effective, so long as the affiliation period is applied uniformly,
      without regard to any health status-related factors.  This paragraph
      does not preclude application of a waiting period applicable to all
      new enrollees under the health insurance coverage, provided that any
      carrier or organized delivery system-imposed waiting period is no
      longer than sixty days and is used in lieu of a preexisting condition
      exclusion.
         d.  Health insurance coverage may exclude coverage for late
      enrollees for preexisting conditions for a period not to exceed
      eighteen months.
         e. (1)  Requirements used by a carrier or organized delivery
      system in determining whether to provide coverage to a small employer
      shall be applied uniformly among all small employers applying for
      coverage or receiving coverage from the carrier or organized delivery
      system.
         (2)  In applying minimum participation requirements with respect
      to a small employer, a carrier or organized delivery system shall not
      consider employees or dependents who have other creditable coverage
      in determining whether the applicable percentage of participation is
      met.
         (3)  A carrier or organized delivery system shall not increase any
      requirement for minimum employee participation or modify any
      requirement for minimum employer contribution applicable to a small
      employer at any time after the small employer has been accepted for
      coverage.
         f. (1)  If a carrier or organized delivery system offers
      coverage to a small employer, the carrier or organized delivery
      system shall offer coverage to all eligible employees of the small
      employer and the employees' dependents.  A carrier or organized
      delivery system shall not offer coverage to only certain individuals
      or dependents in a small employer group or to only part of the group.

         (2)  Except as provided under paragraphs "a" and "d", a
      carrier or organized delivery system shall not modify health
      insurance coverage with respect to a small employer or any eligible
      employee or dependent through riders, endorsements, or other means,
      to restrict or exclude coverage or benefits for certain diseases,
      medical conditions, or services otherwise covered by the health
      insurance coverage.
         g.  A carrier or organized delivery system offering coverage
      through a network plan shall not be required to offer coverage or
      accept applications pursuant to subsection 1 with respect to a small
      employer where any of the following apply:
         (1)  The small employer does not have eligible individuals who
      live, work, or reside in the service area for the network plan.
         (2)  The small employer does have eligible individuals who live,
      work, or reside in the service area for the network plan, but the
      carrier or organized delivery system, if required, has demonstrated
      to the commissioner or the director of public health that it will not
      have the capacity to deliver services adequately to enrollees of any
      additional groups because of its obligations to existing group
      contract holders and enrollees and that it is applying the
      requirements of this lettered paragraph uniformly to all employers
      without regard to the claims experience of those employers and their
      employees and the employees' dependents, or any health status-
      related factor relating to such employees and dependents.
         (3)  A carrier or organized delivery system, upon denying health
      insurance coverage in a service area pursuant to subparagraph (2),
      shall not offer coverage in the small employer market within such
      service area for a period of one hundred eighty days after the
      coverage is denied.
         4.  A carrier or organized delivery system shall not be required
      to offer coverage to small employers pursuant to subsection 1 for any
      period of time where the commissioner or director of public health
      determines that the acceptance of the offers by small employers in
      accordance with subsection 1 would place the carrier or organized
      delivery system in a financially impaired condition.
         5.  A carrier or organized delivery system shall not be required
      to provide coverage to small employers pursuant to subsection 1 if
      the carrier or organized delivery system elects not to offer new
      coverage to small employers in this state.  However, a carrier or
      organized delivery system that elects not to offer new coverage to
      small employers under this subsection shall be allowed to maintain
      its existing policies in the state, subject to the requirements of
      section 513B.5.
         6.  A carrier or organized delivery system that elects not to
      offer new coverage to small employers pursuant to subsection 5 shall
      provide notice to the commissioner or director of public health and
      is prohibited from writing new business in the small employer market
      in this state for a period of five years from the date of notice to
      the commissioner or director.  

         92 Acts, ch 1167, § 11; 93 Acts, ch 80, § 7--9, 20; 97 Acts, ch
      103, §24; 98 Acts, ch 1100, § 69; 2001 Acts, ch 69, §16, 17, 39
         Referred to in § 513B.12