State Codes and Statutes

State Codes and Statutes

Statutes > Nebraska > Chapter44 > 44-5260

44-5260. Small employer, defined; group healthplan; health benefit plans; requirements; filing; exceptions; preexistingcondition exclusion; network plans.(1) For purposes of thissection, small employer shall mean, in connection with a group health planwith respect to a calendar year and a plan year, any person, firm, corporation,partnership, association, or political subdivision that is actively engagedin business that employed an average of at least two but not more than fiftyemployees on business days during the preceding calendar year and who employsat least two employees on the first day of the plan year. All persons treatedas a single employer under subsection (b), (c), (m), or (o) of section 414of the Internal Revenue Code shall be treated as one employer. Subsequentto the issuance of a health benefit plan to a small employer and for the purposeof determining continued eligibility, the size of a small employer shall bedetermined annually. Except as otherwise specifically provided, provisionsof the Small Employer Health Insurance Availability Act that apply to a smallemployer shall continue to apply at least until the health benefit plan anniversaryfollowing the date the small employer no longer meets the requirements ofthis definition. In the case of an employer which was not in existence throughoutthe preceding calendar year, the determination of whether the employer isa small or large employer shall be based on the average number of employeesthat it is reasonably expected the employer will employ on business days inthe current calendar year. Any reference in the act to an employer shall includea reference to any predecessor of such employer.(2)(a) Every small employer carrier shall, as a condition of transactingbusiness in this state with small employers, actively offer to small employersall health benefit plans it actively markets to small employers in this state,including at least two health benefit plans. One health benefit plan offeredby each small employer carrier shall be a basic health benefit plan, and oneplan shall be a standard health benefit plan. A small employer carrier shallbe considered to be actively marketing a health benefit plan if it offersthat plan to any small employer not currently receiving a health benefit planby such small employer carrier. Thissubdivision shall not require a small employer carrier to offer to small employersa health benefit plan marketed only through a bona fide association.(b)(i) Subject to subdivision (2)(a) of this section, a small employercarrier shall issue any health benefit plan to any eligible small employerthat applies for the plan and agrees to make the required premium paymentsand to satisfy the other reasonable provisions of the health benefit plannot inconsistent with the Small Employer Health Insurance Availability Act.However, no small employer carrier shall be required to issue a health benefitplan to a self-employed individual who is covered by, or is eligible for coverageunder, a health benefit plan offered by an employer.(ii) In the case of a small employer carrier that establishes more thanone class of business, the small employer carrier shall maintain and issueto eligible small employers at least one basic health benefit plan and atleast one standard health benefit plan in each class of business so established.A small employer carrier may apply reasonable criteria in determining whetherto accept a small employer into a class of business if:(A) The criteria are not intended to discourage or prevent acceptanceof small employers applying for a basic health benefit plan or a standardhealth benefit plan;(B) The criteria are not related to the health status or claim experienceof employees or dependents of the small employer;(C) The criteria are applied consistently to all small employers applyingfor coverage in the class of business; and(D) The small employer carrier provides for the acceptance of all eligiblesmall employers into one or more classes of business.The provisions of subdivision (2)(b)(ii) of this section shall not applyto a class of business into which the small employer carrier is no longerenrolling new small businesses.(3)(a) A small employer carrier shall file with the director, in a formatand manner prescribed by the director, the basic health benefit plans andthe standard health benefit plans to be used by the carrier. A health benefitplan filed pursuant to this subsection may be used by a small employer carrierbeginning thirty days after it is filed unless the director disapproves itsuse.(b) The director at any time may, after providing notice and an opportunityfor a hearing to the small employer carrier, disapprove the continued useby a small employer carrier of a basic health benefit plan or standard healthbenefit plan on the grounds that the plan does not meet the requirements ofthe act.(4) Health benefit plans covering small employers shall comply withthe following provisions:(a) A health benefit plan shall not deny, exclude, or limit benefitsfor a covered individual for losses incurred more than twelve months, or eighteenmonths in the case of a late enrollee, following the enrollment date of theindividual's coverage due to a preexisting condition or the first date ofthe waiting period for enrollment if that date is earlier than the enrollmentdate. A health benefit plan shall not define a preexisting condition morerestrictively than as defined in section 44-5246.02. A health benefit planshall not impose any preexisting condition exclusion relating to pregnancyas a preexisting condition;(b) A health benefit plan shall not impose any preexisting conditionexclusion:(i) To an individual who, as of the last day of the thirty-day periodbeginning with the date of birth, is covered under creditable coverage, andthe individual had creditable coverage that was continuous to a date not morethan sixty-three days prior to the enrollment date of new coverage; or(ii) To a child less than eighteen years of age who is adopted or placedfor adoption and who, as of the last day of the thirty-day period beginningon the date of the adoption or placement for adoption, is covered under creditablecoverage, and the child had creditable coverage that was continuous to a datenot more than sixty-three days prior to the enrollment date of new coverage;(c)(i) A small employer carrier shall waive any time period applicableto a preexisting condition exclusion or limitation period with respect toparticular services in a health benefit plan for the aggregate period of timean individual was previously covered by creditable coverage that providedbenefits with respect to such services if the creditable coverage was continuousto a date not more than sixty-three days prior to the enrollment date of newcoverage. The period of continuous coverage shall not include any waitingperiod or affiliation period for the effective date of the new coverage appliedby the employer or the carrier. This subdivision shall not preclude applicationof any waiting period applicable to all new enrollees under the health benefitplan.(ii) A small employer carrier that does not use preexisting conditionlimitations in any of its health benefit plans may impose an affiliation period:(A) That does not exceed sixty days for new entrants and does not exceedninety days for late enrollees;(B) During which the carrier charges no premiums and the coverage issuedis not effective; and(C) That is applied uniformly, without regard to any health-status-relatedfactor.(iii) This subdivision does not preclude application of any waitingperiod applicable to all enrollees under the health benefit plan if any carrierwaiting period is no longer than sixty days.(iv)(A) In lieu of the requirements of subdivision (4)(c)(i) of thissection, a small employer carrier may elect to reduce the period of any preexistingcondition exclusion based on coverage of benefits within each of several classesor categories of benefits specified in federal regulations.(B) A small employer electing to reduce the period of any preexistingcondition exclusion using the alternative method described in subdivision(4)(c)(iv)(A) of this section shall make the election on a uniform basis forall enrollees and count a period of creditable coverage with respect to anyclass or category of benefits if any level of benefits is covered within theclass or category.(C) A small employer carrier electing to reduce the period of any preexistingcondition exclusion using the alternative method described in subdivision(4)(c)(iv)(A) of this section shall prominently state that the election hasbeen made in any disclosure statements concerning coverage under the healthbenefit plan to each enrollee at the time of enrollment under the plan andto each small employer at the time of the offer or sale of the coverage andinclude in the disclosure statements the effect of the election;(d)(i) A small employer carrier shall permit an eligible employee ordependent, who requests enrollment following the open enrollment opportunity,to enroll, and the eligible employee or dependent shall not be considereda late enrollee if the eligible employee or dependent:(A) Was covered under another health benefit plan at the time the eligibleemployee or dependent was eligible to enroll;(B) Stated in writing at the time of the open enrollment period thatcoverage under another health benefit plan was the reason for declining enrollmentbut only if the health benefit plan or health carrier required such a writtenstatement and provided a notice of the consequences of such written statement;(C) Has lost coverage under another health benefit plan as a resultof the termination of employment, the termination of the other health benefitplan's coverage, death of a spouse, legal separation, or divorce or was undera continuation-of-coverage policy or contract available under federal lawand the coverage was exhausted; and(D) Requests enrollment within thirty days after the termination ofcoverage under the other health benefit plan.(ii)(A) If a small employer carrier issues a health benefit plan andmakes coverage available to a dependent of an eligible employee and such dependentbecomes a dependent of the eligible employee through marriage, birth, adoption,or placement for adoption, then such health benefit plan shall provide fora dependent special enrollment period during which the dependent may be enrolledunder the health benefit plan and, in the case of the birth or adoption ofa child, the spouse of an eligible employee may be enrolled if otherwise eligiblefor coverage.(B) A dependent special enrollment period shall be a period of not lessthan thirty days and shall begin on the later of (I) the date such dependentcoverage is available or (II) the date of the marriage, birth, adoption, orplacement for adoption.(C) If an eligible employee seeks to enroll a dependent during the firstthirty days of such a dependent special enrollment period, the coverage ofthe dependent shall become effective:(I) In the case of marriage, not later than the first day of the firstmonth beginning after the date the completed request for enrollment is received;(II) In the case of the birth of a dependent, as of the date of birth;and(III) In the case of a dependent's adoption or placement for adoption,the date of such adoption or placement for adoption;(e)(i) Except as provided in subdivision (4)(e)(iv) of this section,requirements used by a small employer carrier in determining whether to providecoverage to a small employer, including requirements for minimum participationof eligible employees and minimum employer contributions, shall be applieduniformly among all small employers with the same number of eligible employeesapplying for coverage or receiving coverage from the small employer carrier.(ii) A small employer carrier may vary application of minimum participationrequirements and minimum employer contribution requirements only by the sizeof the small employer group.(iii)(A) Except as provided in subdivision (4)(e)(iii)(B) of this section,in applying minimum participation requirements with respect to a small employer,a small employer carrier shall not consider employees or dependents who havecreditable coverage in determining whether the applicable percentage of participationis met.(B) With respect to a small employer with ten or fewer eligible employees,a small employer carrier may consider employees or dependents who have coverageunder another health benefit plan sponsored by such small employer in applyingminimum participation requirements.(iv) A small employer carrier shall not increase any requirement forminimum employee participation or any requirement for minimum employer contributionapplicable to a small employer at any time after the small employer has beenaccepted for coverage; and(f)(i) If a small employer carrier offers coverage to a small employer,the small employer carrier shall offer coverage to all of the eligible employeesof a small employer and their dependents who apply for enrollment during theperiod in which the employee first becomes eligible to enroll under the termsof the plan. A small employer carrier shall not offer coverage to only certainindividuals in a small employer group or to only part of the group exceptin the case of late enrollees as provided in subdivision (4)(a) of this section.(ii) Except as permitted under subdivisions (a) and (d) of this subsection,a small employer carrier shall not modify a health benefit plan with respectto a small employer or any eligible employee or dependent, through riders,endorsements, or otherwise, to restrict or exclude coverage or benefits forspecific diseases, medical conditions, or services otherwise covered by theplan.(iii) A small employer carrier shall not place any restriction in regardto any health-status-related factor on an eligible employee or dependent withrespect to enrollment or plan participation.(5) A small employer carrier shall not be required to offer coverageor accept applications pursuant to subsection (2) of this section in the caseof the following:(a) To an employee if previous basic health benefit plans or standardhealth benefit plans have, in the aggregate, paid one million dollars in benefitson behalf of the employee. Benefits paid on behalf of the employee in theimmediately preceding two calendar years by prior small employer carriersunder basic and standard plans shall be included when calculating the lifetimemaximum benefits payable under the succeeding basic or standard plans. Inany situation in which a determination of the total amount of benefits paidby prior small employer carriers is required by the succeeding carrier, priorcarriers shall furnish a statement of the total benefits paid under basicand standard plans at the succeeding carrier's request; or(b) Within an area where the small employer carrier reasonably anticipates,and demonstrates to the satisfaction of the director, that it will not havethe capacity within its established geographic service area to deliver serviceadequately to the members of such groups because of its obligations to existinggroup policyholders and enrollees.(6)(a) A small employer carrier offering coverage through a networkplan shall not be required to offer coverage or accept applications pursuantto subsection (2) of this section to or from a small employer as defined insubsection (1) of this section:(i) If the small employer does not have eligible employees who live,work, or reside in the service area for such network plan; or(ii) If the small employer does have eligible employees who live, work,or reside in the service area for such network plan, the carrier has demonstrated,if required, to the director that it will not have the capacity to deliverservices adequately to enrollees of any additional groups because of its obligationsto existing group contract holders and enrollees and that it is applying subdivision(6)(a)(ii) of this section uniformly to all employers without regard to theclaims experience of those employers and their employees and their dependentsor any health-status-related factor relating to such employees and dependents.(b) A small employer carrier, upon denying health insurance coveragein any service area in accordance with subdivision (6)(a)(ii) of this section,shall not offer coverage in the small employer market within such servicearea for a period of one hundred eighty days after the date such coverageis denied.(7) A small employer carrier shall not be required to provide coverageto small employers pursuant to subsection (2) of this section for any periodof time for which the director determines that requiring the acceptance ofsmall employers in accordance with the provisions of such subsection wouldplace the small employer carrier in a financially impaired condition. SourceLaws 1994, LB 1222, § 38; Laws 1995, LB 837, § 4; Laws 1997, LB 862, § 46; Laws 2002, LB 1139, § 33; Laws 2009, LB192, § 8.