* This bulletin was repealed by 08-05

To:           All Insurance Companies Providing Health Insurance

From:      Jay Angoff, Director

Re:          Association Groups

Date:       November 19, 1996

It has recently come to the attention of the Missouri Department of Insurance that some small employer carriers have failed to rate small employers in association groups in accordance with the requirements of the Small Employer Health Insurance Availability Act ("the Small Employer Act"). This has resulted in unequal treatment between associations.

Pursuant to the authority vested in him under the Small Employer Act, the Director has determined to take the following actions to enhance the efficiency and fairness of the marketplace for small employer insurance:

  • Section 379.934.1 authorizes small employer carriers to establish separate classes of business for rating purposes. Subdivision (3) of this subsection authorizes a separate class or classes to be established just for association groups. To the extent that they have not already done so, small employer carriers may place association groups into a separate class or classes of business. Section 379.934.2 authorizes a small employer carrier to establish up to nine separate classes without the approval of the Director. If a small employer carrier wishes to create more than the maximum nine classes authorized by Section 379.934.2, the Department is willing to review and approve requests to establish additional classes pursuant to Section 379.934.4.
  • Pursuant to Section 379.936.3, the Director is hereby suspending the application of the requirements of Section 379.936.1(1) for a period of one year for all association group classes of business. Therefore, no small employer carrier is required to raise its association group rates by Section 379.936. Small employer carriers are requested to notify the Department of the association groups to which this suspension of Section 379.936.1(1) will apply.

Small employer carriers are reminded that the above suspension of the index rating restrictions does not exempt them from the requirement of Section 379.940.2(5)(a) that they accept or reject a small employer as a group, nor does it exempt them from the requirement of Section 379.952.1 that they offer the Basic and Standard Plans to each small employer that is rejected for any other small employer plan. Small employer carriers should also be aware that the guarantee issue requirement currently applicable to only the Basic and Standard Plans under Missouri's Small Employer Act will extend to all health insurance coverage offered in the small group market effective July 1, 1997, pursuant to the newly enacted, federal Health Insurance Portability and Accountability Act of 1996 (H.R. 3103 -- Kassebaum/Kennedy).