45 CFR 146.152 - Guaranteed renewability of coverage for employers in the group market.

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§ 146.152 Guaranteed renewability of coverage for employers in the group market. Link to an amendment published at 79 FR 53004, Sept. 5, 2014.
(a) General rule. Subject to paragraphs (b) through (d) of this section, a health insurance issuer offering health insurance coverage in the small or large group market is required to renew or continue in force the coverage at the option of the plan sponsor.
(b) Exceptions. An issuer may nonrenew or discontinue group health insurance coverage offered in the small or large group market based only on one or more of the following:
(1) Nonpayment of premiums. The plan sponsor has failed to pay premiums or contributions in accordance with the terms of the health insurance coverage, including any timeliness requirements.
(2) Fraud. The plan sponsor has performed an act or practice that constitutes fraud or made an intentional misrepresentation of material fact in connection with the coverage.
(3) Violation of participation or contribution rules. The plan sponsor has failed to comply with a material plan provision relating to any employer contribution or group participation rules permitted under § 146.150(e) in the case of the small group market or under applicable State law in the case of the large group market.
(4) Termination of product. The issuer is ceasing to offer coverage in the market in accordance with paragraph (c) or (d) of this section and applicable State law.
(5) Enrollees' movement outside service area. For network plans, there is no longer any enrollee under the group health 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 applies the same criteria it would apply in denying enrollment in the plan under § 146.150(c).
(6) Association membership ceases. For coverage made available in the small or large group market only through one or more bona fide associations, if the employer's membership in the association ceases, but only if the coverage is terminated uniformly without regard to any health status-related factor relating to any covered individual.
(c) Discontinuing a particular product. In any case in which an issuer decides to discontinue offering a particular product offered in the small or large group market, that product may be discontinued by the issuer in accordance with applicable State law in the particular market only if—
(1) The issuer provides notice in writing, in a form and manner specified by the Secretary, to each plan sponsor provided that particular product in that market (and to all participants and beneficiaries covered under such coverage) of the discontinuation at least 90 days before the date the coverage will be discontinued;
(2) The issuer offers to each plan sponsor provided that particular product the option, on a guaranteed issue basis, 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 in that market; and
(3) In exercising the option to discontinue that product and in offering the option of coverage under paragraph (c)(2) of this section, the issuer acts uniformly without regard to the claims experience of those sponsors 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.
(d) Discontinuing all coverage. An issuer may elect to discontinue offering all health insurance coverage in the small or large group market or both markets in a State in accordance with applicable State law only if—
(1) The issuer provides notice in writing to the applicable State authority and to each plan sponsor (and all participants and beneficiaries covered under the coverage) of the discontinuation at least 180 days prior to the date the coverage will be discontinued; and
(2) All health insurance policies issued or delivered for issuance in the State in the market (or markets) are discontinued and not renewed.
(e) Prohibition on market reentry. An issuer who elects to discontinue offering all health insurance coverage in a market (or markets) in a State as described in paragraph (d) of this section may not issue coverage in the market (or markets) and State involved during the 5-year period beginning on the date of discontinuation of the last coverage not renewed.
(f) Exception for uniform modification of coverage.
(1) Only at the time of coverage renewal may issuers modify the health insurance coverage for a product offered to a group health plan in the following—
(i) Large group market; and
(ii) Small group market if, for coverage available in this market (other than only through one or more bona fide associations), the modification is consistent with State law and is effective uniformly among group health plans with that product.
(2) For purposes of paragraph (f)(1)(ii) of this section, modifications made uniformly and solely pursuant to applicable Federal or State requirements are considered a uniform modification of coverage if:
(i) The modification is made within a reasonable time period after the imposition or modification of the Federal or State requirement; and
(ii) The modification is directly related to the imposition or modification of the Federal or State requirement.
(3) For purposes of paragraph (f)(1)(ii) of this section, other types of modifications made uniformly are considered a uniform modification of coverage if the health insurance coverage for the product in the small group market meets all of the following criteria:
(i) The product is offered by the same health insurance issuer (within the meaning ofsection 2791(b)(2) of the PHS Act);
(ii) The product is offered as the same product network type (for example, health maintenance organization, preferred provider organization, exclusive provider organization, point of service, or indemnity);
(iii) The product continues to cover at least a majority of the same service area;
(iv) Within the product, each plan has the same cost-sharing structure as before the modification, except for any variation in cost sharing solely related to changes in cost and utilization of medical care, or to maintain the same metal tier level described insections 1302(d) and (e) of the Affordable Care Act; and
(v) The product provides the same covered benefits, except for any changes in benefits that cumulatively impact the rate for any plan within the product within an allowable variation of ±2 percentage points (not including changes pursuant to applicable Federal or State requirements).
(4) A State may only broaden the standards in paragraphs (f)(3)(iii) and (iv) of this section.
(g) Application to coverage offered only through associations. 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, the 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.
(h) Notice of renewal of coverage. If an issuer in the small group market is renewing grandfathered coverage as described in paragraph (a) of this section, or uniformly modifying grandfathered coverage as described in paragraph (f) of this section, the issuer must provide to each plan sponsor written notice of the renewal at least 60 calendar days before the date the coverage will be renewed in a form and manner specified by the Secretary.
(Approved by the Office of Management and Budget under control number 0938-0702)
[62 FR 16958, Apr. 8, 1997; 62 FR 31670, June 10, 1997, as amended at 62 FR 35906, July 2, 1997; 79 FR 30335, May 27, 2014]
Effective Date Note:
At 79 FR 53004, Sept. 5, 2014, § 146.152 was amended by revising paragraph (b)(5), effective Oct. 6, 2014. For the convenience of the user, the revised text is set forth as follows:
§ 146.152 Guaranteed renewability of coverage for employers in the group market.
(b) * * *
(5) Enrollees' movement outside service area. For network plans, there is no longer any enrollee under the group health 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 applies the same criteria it would apply in denying enrollment in the plan under § 146.150(c); provided the issuer provides notice in accordance with the requirements of paragraph (c)(1) of this section.

Title 45 published on 2014-10-01.

The following are only the Rules published in the Federal Register after the published date of Title 45.

For a complete list of all Rules, Proposed Rules, and Notices view the Rulemaking tab.

  • 2015-03-18; vol. 80 # 52 - Wednesday, March 18, 2015
    1. 80 FR 13995 - Amendments to Excepted Benefits
      GPO FDSys XML | Text
      DEPARTMENT OF HEALTH AND HUMAN SERVICES, DEPARTMENT OF LABOR, DEPARTMENT OF THE TREASURY, Internal Revenue Service, Employee Benefits Security Administration
      Final rules.
      These final regulations are effective on May 18, 2015.
      26 CFR Part 54

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Title 45 published on 2014-10-01

The following are ALL rules, proposed rules, and notices (chronologically) published in the Federal Register relating to 45 CFR Part 146 after this date.

  • 2015-03-18; vol. 80 # 52 - Wednesday, March 18, 2015
    1. 80 FR 13995 - Amendments to Excepted Benefits
      GPO FDSys XML | Text
      DEPARTMENT OF HEALTH AND HUMAN SERVICES, DEPARTMENT OF LABOR, DEPARTMENT OF THE TREASURY, Internal Revenue Service, Employee Benefits Security Administration
      Final rules.
      These final regulations are effective on May 18, 2015.
      26 CFR Part 54