2022 Delaware Code
Title 18 - Insurance Code
Chapter 72. SMALL EMPLOYER HEALTH INSURANCE
§ 7202. Definitions [For application of this section, see 79 Del. Laws, c. 99, § 19].
As used in this chapter:
(1) “Actuarial certification” means a written statement by a member of the American Academy of Actuaries, or other individual acceptable to the Commissioner, that a small employer carrier is in compliance with the provisions of § 7205 of this title, based upon an examination and including a review of the appropriate records and the actuarial assumptions and methods used by the small employer carrier in establishing premium rates for applicable health benefit plans.
(2) “Affiliate” or “affiliated” means any entity or person who directly or indirectly through 1 or more intermediaries, controls or is controlled by, or is under common control with, a specified entity or person.
(3) “Affiliation period” means a period of time not to exceed 2 months (3 months for late enrollees) during which a health maintenance organization does not collect premiums and coverage issued is not effective.
(4) “Base premium rate” means, for each class of business as to a rating period, the lowest premium rate charged or that could have been charged under a rating system for that class of business by the small employer carrier to small employers with similar case characteristics for health benefit plans with the same or similar coverage.
(5) “Basic health benefit plan” means a lower cost health benefit plan developed pursuant to § 7211 of this title.
(6) “Board” means the board of directors of the program established pursuant to § 7210 of this title [repealed].
(7) “Bona fide association” means, with respect to health insurance coverage offered in Delaware, an association which:
a. Has been actively in existence for at least 5 years;
b. Has been formed and maintained in good faith for purposes other than obtaining insurance and does not condition membership on the purchase of association-sponsored insurance;
c. Does not condition membership in the association on any health status-related factor relating to an individual (including an employee of an employer or a dependent of an employee) and clearly so states in all membership and application materials;
d. Makes health insurance coverage offered through the association available to all members regardless of any health status-related factor relating to such members (or individuals eligible for coverage through a member) and clearly so states in all marketing and application materials;
e. Does not make health insurance coverage offered through the association available other than in connection with a member of the association and clearly so states in all marketing and application materials; and
f. Provides and annually updates information necessary for the Commissioner to determine whether or not an association meets the definition of a bona fide association before qualifying as a bona fide association for the purposes of this chapter.
(8) “Carrier” means any entity that provides health insurance in this State. For the purposes of this chapter, carrier includes an insurance company, health service corporation, health maintenance organization and any other entity providing a plan of health insurance or health benefits subject to state insurance regulation.
(9) “Case characteristics” means demographic or other objective characteristics of a small employer that are considered by the small employer carrier in the determination of premium rates for the small employer, provided that claim experience, health status and duration of coverage shall not be case characteristics for the purposes of this chapter. The small employer carrier shall not use case characteristics other than age, industry (subject to § 7205(6) of this title), geographic area, family composition, unhealthy lifestyle choices and group size without prior approval of the Commissioner.
(10) “Class of business” means all of a carrier's business unless more than 1 class is established pursuant to § 7204 of this title.
(11) “Commissioner” means the Insurance Commissioner of this State.
(12) “Committee” means the Health Benefit Plan Committee created pursuant to § 7211 of this title.
(13) “Control” shall be defined in the same manner as in § 5002 of this title.
(14) “Creditable coverage” means, with respect to an individual, health benefits or coverage provided under any of the following:
a. A group health benefit plan;
b. An individual health benefit plan or individual insurance coverage;
c. Part A or Part B of Title XVIII of the Social Security Act [42 U.S.C. § 1395 et seq. or 42 U.S.C. § 1395j et seq.];
d. Title XIX of the Social Security Act [42 U.S.C. § 1396 et seq.], other than coverage consisting solely of benefits under § 1928 [42 U.S.C. § 1396s];
e. Chapter 55 of Title 10, United States Code [10 U.S.C. § 1071 et seq.];
f. A medical care program of the Indian Health Service or of a tribal organization;
g. A state health benefits risk pool;
h. A health plan offered under Chapter 89 of Title 5, United States Code;
i. A public health plan as defined in federal regulations;
j. A health benefit plan under § 5(e) of the Peace Corps Act [22 U.S.C. § 2504(e)].
(15) “Dependent” means a spouse, a child under the age of 26 years, and an unmarried child of any age who is medically certified as totally disabled and dependent upon the parent.
(16) “Eligible employee” means an employee who works on a full-time basis and has a normal work week of 30 or more hours. The term includes a sole proprietor, a partner of a partnership and an independent contractor, if the sole proprietor, partner or independent contractor is included as an employee under a health benefit plan of a small employer, but does not include an employee who works on a part-time, temporary or substitute basis. With respect to any health benefit plan of a small employer that is purchased through the state health insurance exchange program or Small Business Health Options Program (SHOP) established pursuant to the Patient Protection and Affordable Care Act [P.L. 111-148], the term “eligible employee” shall not include a sole proprietor, a partner of a partnership, independent contractor, a member of a limited liability company taxed as a partnership, shareholder owning more than 2% of an S corporation, or any owner of more than 5% of other businesses, or any family member of such owners or partners, or an employee who works on a part-time, temporary or substitute basis.
(17) “Established geographic service area” means a geographic area, as approved by the Commissioner and based on the carrier's certificate of authority to transact insurance in this State, within which the carrier is authorized to provide coverage.
(18) “Health benefit plan” means any hospital or medical expense policy or certificate, hospital or medical service corporation contract, health maintenance organization or health service corporation subscriber contract or any other similar health contract, including a high deductible medical expense policy used in conjunction with a medical savings account, subject to the jurisdiction of the Commissioner available for use, offered or sold to an individual in the State of Delaware. This term includes a bona fide association plan if such plan provides coverage to 1 or more eligible employees of a small employer in Delaware.
“Health benefit plan” does not include:
accident only; credit; dental; vision; Medicare supplement; benefits for long-term care, home health care, community-based care or any combination thereof; disability income insurance; liability insurance including general liability insurance and automobile liability insurance; coverage for on-site medical clinics; coverage issued as a supplement to liability insurance, worker's compensation or similar insurance; or automobile medical payment insurance. The term also excludes specified disease, hospital confinement indemnity or limited benefit health insurance if such types of coverage do not provide coordination of benefits and are provided under separate policies or certificates; provided, that the carrier offering such policies or certificates complies with the following:a. The carrier files on or before March 1 of each year a certification with the Commissioner that contains the statement and information described in paragraph (18)b. of this section.
b. The certification shall contain the following:
1. A statement from the carrier certifying that policies or certificates described in this paragraph are being offered and marketed as supplemental health insurance and not as a substitute for hospital or medical expense insurance or major medical expense insurance.
2. A summary description of each policy or certificate described in this paragraph, including the average annual premium rates (or range of premium rates in cases where premiums vary by age or other factors) charged for these policies and certificates in this State.
c. In the case of a policy or certificate that is described in this paragraph and that is offered for the first time in this State on or after July 1, 1997, the carrier files with the Commissioner the information and statement required in paragraph (18)b. of this section at least 30 days prior to the date the policy or certificate is issued or delivered in this State.
(19) “Health status-related factor” means any of the following factors:
a. Health status;
b. Medical condition, including both physical and mental illnesses;
c. Claims experience;
d. Receipt of health care;
e. Medical history;
f. Genetic information, as defined in § 2317 of this title;
g. Evidence of insurability, including conditions arising out of acts of domestic violence;
h. Disability.
(20) “Index rate” means, for each class of business as to a rating period for small employers, the arithmetic average of the applicable base premium rate and the corresponding highest premium rate.
(21) “Late enrollee” means an eligible employee or dependent who requests enrollment in a group health benefit plan following the initial enrollment period during which such individual is entitled to enroll under the terms of the health benefit plan, if such initial enrollment period is a period of at least 30 days. An eligible employee or dependent shall not be considered a late enrollee if:
a. The individual:
1. Was covered under other creditable coverage at the time of the initial enrollment period and, if required by the employer, policyholder, carrier or issuer, the employee stated at the time of initial enrollment that this was the reason for declining enrollment;
2. Lost coverage under the other creditable coverage as a result of termination of employment or eligibility, reduction in the number of hours of employment, the involuntary termination of the creditable coverage, death of a spouse, legal separation or divorce or employer contributions towards such coverage was terminated; and
3. Requests enrollment within 30 days after termination of the other creditable coverage;
b. The individual is employed by an employer that offers multiple health benefit plans and elects a different plan during an open enrollment period;
c. A court has ordered that coverage be provided for a dependent under a covered employee's health benefit plan and the request for enrollment is made within 30 days after issuance of such court order; or
d. A person becomes a dependent of a covered person through marriage, birth, adoption or placement for adoption and requests enrollment no later than 30 days after becoming such a dependent. In such case, coverage shall commence on the date the person becomes a dependent if a request for enrollment is received in a timely fashion before such date.
(22) “Medical care” means amounts paid for:
a. The diagnosis, cure, mitigation, treatment or prevention of disease or amounts paid for the purpose of affecting any structure or function of the body;
b. Transportation primarily for and essential to medical care referred to in paragraph (22)a. of this section; and
c. Insurance covering medical care referred to in paragraphs (22)a. and b. of this section.
(23) “New business premium rate” means, for each class of business as to a rating period, the lowest premium rate charged or offered or which could have been charged or offered by the small employer carrier to small employers with similar case characteristics for newly issued health benefit plans with the same or similar coverage.
(24) “Plan of operation” means the plan of operation of the program established pursuant to § 7210 of this title [repealed].
(25) “Premium” means all moneys paid by a small employer and eligible employees as a condition of receiving coverage from a small employer carrier, including any fees or other contributions associated with the health benefit plan.
(26) “Producer” means agent and/or broker.
(27) “Program” means the Delaware Small Employer Reinsurance Program created by § 7210 of this title [repealed].
(28) “Qualifying previous coverage” and “qualifying existing coverage” shall have the same meaning as the term “creditable coverage;” provided however, that for purposes of determining a participation requirement, “qualifying previous coverage” and “qualifying existing coverage” means benefits or coverage provided under:
a. Medicare or Medicaid;
b. An employer-based health insurance or health benefit arrangement that provides benefits similar to or exceeding benefits provided under the basic health benefit plan; or
c. An individual health insurance policy (including coverage issued by a health maintenance organization, health service organization and fraternal benefit society) that provides benefits similar to or exceeding the benefits provided under the basic health benefit plan; provided, that such policy has been in effect for 1 year.
(29) “Rating period” means the calendar period for which premium rates established by a small employer carrier are assumed to be in effect.
(30) “Reinsuring carrier” means a small employer carrier participating in the reinsurance program pursuant to § 7210 of this title [repealed].
(31) “Restricted network provision” means any provision of a health benefit plan that conditions the payment of benefits, in whole or in part, on the use of health-care providers that have entered into a contractual arrangement with the carrier pursuant to Chapter 64 of this title or otherwise to provide health-care services to covered individuals.
(32) “Risk-assuming carrier” means a small employer carrier whose application is approved by the Commissioner pursuant to § 7209 of this title.
(33) “Small employer” means any person, firm, corporation, partnership or association that is actively engaged in business that, on at least 50% of its working days during the preceding calendar quarter, employed no more than 50 eligible employees, the majority of whom were employed within this State. In determining the number of eligible employees, companies that are affiliated companies, or that are eligible to file a combined tax return for purposes of state taxation, shall be considered 1 employer. With respect to any health benefit plan of a small employer that is purchased through the state health insurance exchange program or SHOP established pursuant to the Patient Protection and Affordable Care Act [P.L. 111-148], the term “small employer” shall not include a sole proprietorship, partnership, independent contractor, limited liability company taxed as a partnership, S corporation or any other business that employs only such owners or partners or family members thereof.
(34) “Small employer carrier” means a carrier that offers health benefit plans covering eligible employees of 1 or more small employers in this State.
a. Except as provided in paragraph (34)b. of this section, for the purposes of this chapter, carriers that are affiliated companies or that are eligible to file a consolidated tax return shall be treated as 1 carrier and any restrictions or limitations imposed by this chapter shall apply as if all health benefit plans delivered or issued for delivery to small employers in this State by such affiliated carriers were issued by 1 carrier.
b. An affiliated carrier that is a health maintenance organization having a certificate of authority under Chapter 64 of this title may be considered to be a separate carrier for the purposes of this chapter.
c. Unless otherwise authorized by the Commissioner, a small employer carrier shall not enter into 1 or more ceding arrangements with respect to health benefit plans delivered or issued for delivery to small employers in this State if such arrangements would result in less than 50% of the insurance obligation or risk for such health benefit plans being retained by the ceding carrier. The provisions of §§ 910 and 4944 of this title shall apply if a small employer carrier cedes or assumes all of the insurance obligation or risk with respect to 1 or more health benefit plans delivered or issued for delivery to small employers in this State.
In the case of an employer that was not in existence throughout the preceding calendar quarter, the determination of whether such employer is a small or large employer shall be based on the average number of employees that is reasonably expected such employer will employ on business days in the current calendar year.
(35) “Standard health benefit plan” means a health benefit plan developed pursuant to § 7211 of this title.
(36) “Unhealthy lifestyle choices” means smoking or maintaining excessive weight, blood pressure or cholesterol, other than due to organic causes that are being treated by a physician, as those conditions or actions may be more fully defined by regulation by the Commissioner.
(37) “Waiting period” means, with respect to a group health plan and an individual who is a potential participant in or beneficiary of the plan, the period that must pass with respect to the individual before the individual is eligible for benefits under the terms of the plan. For purposes of calculating periods of creditable coverage, a waiting period shall not be considered a gap in coverage.
