Tennessee Code Annotated

Title 56: Insurance

Chapter 7: Policies and Policyholders

Part 22: Tennessee Small Employer Group Health Coverage Reform Act

TCA 56-7-2203: Part definitions.

As used in this part, unless the context otherwise requires:

(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 SC 56-7-2209, based upon the person's examination, including a review of the appropriate records and of the actuarial assumptions and methods used by the small employer carrier in establishing premium rates for applicable health benefit plans;

(2) "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;

(3) [Deleted by 2011 amendment.]

(4) "Board" means the board of directors of the pool;

(5) "Carrier" means any person that provides one (1) or more health benefit plans in this state, including a licensed insurance company, a prepaid hospital or medical service plan, a health maintenance organization (HMO) and a multiple employer welfare arrangement (MEWA);

(6) "Case characteristics" means demographic or other objective characteristics of a small employer, as determined by a small employer carrier, that are considered by the small employer carrier in the determination of premium rates for the small employer, but does not mean claim experience, health status and duration of coverage since issue;

(7) "Class of business" means all or a distinct grouping of small employers as shown on the records of a small employer carrier;

(8) [Deleted by 2011 amendment.]

(9) "Dependent" means the spouse or child of an eligible employee, subject to applicable terms of the health care plan covering the employee;

(10) "Eligible employee" means an employee who works for a small employer on a full-time basis, with a normal work week of thirty (30) or more hours, including a sole proprietor, a partner or a partnership, or an independent contractor, if included as an employee under a health care plan of a small employer. "Eligible employee" does not include employees who work on a part-time, temporary, or substitute basis;

(11) (A) "Health benefit plan" means:

(i) Any accident and health insurance policy or certificate;

(ii) Nonprofit hospital or medical service corporation contract;

(iii) Health, hospital or medical service corporation plan contract;

(iv) HMO subscriber contract;

(v) Plan provided by a MEWA; or

(vi) Plan provided by another benefit arrangement, to the extent permitted by Employee Retirement Income Security Act (ERISA), compiled in 29 U.S.C. SC 1001 et seq., subject to SC 56-7-2206.

(B) "Health benefit plan" does not mean:

(i) Accident only, specified disease only, fixed indemnity, credit or disability insurance;

(ii) Coverage or medicare services pursuant to contracts with the federal government;

(iii) Medicare supplement or long-term care insurance;

(iv) Dental only or vision only insurance;

(v) Coverage issued as a supplement to liability insurance;

(vi) Insurance arising out of a workers' compensation or similar law;

(vii) Automobile medical payment insurance; or

(viii) Insurance under which benefits are payable with or without regard to fault and that is statutorily required to be contained in any liability insurance policy or equivalent self-insurance;

(12) "Health group cooperative" or "cooperative" means a private purchasing cooperative composed of small employers formed under this part;

(13) "Impaired insurer" has the same meaning as in SC 56-12-203;

(14) "Index rate" means, for each class of business as to a rating period for small employers with similar case characteristics, the arithmetic average of the applicable base premium rate and the corresponding highest premium rate;

(15) "Late enrollee" means an eligible employee or dependent who requests enrollment in a health benefit plan of a small employer following the initial enrollment period provided under the terms of the health benefit plan; provided, that the initial enrollment period shall be a period of at least thirty (30) days. However, an eligible employee or dependent shall not be considered a late enrollee if:

(A) The individual:

(i) Was covered under another employer health benefit plan at the time the individual was eligible to enroll;

(ii) Stated, at the time of the initial enrollment, that coverage under another employer health benefit plan was the reason for declining enrollment;

(iii) Has lost coverage under another employer health benefit plan as a result of termination of employment, the termination of the other plan's coverage, death of a spouse or divorce; and

(iv) Requests enrollment within thirty (30) days after termination of coverage provided under another employer health benefit plan;

(B) The individual is employed by an employer that offers multiple health benefit plans and the individual elects a different plan during an open enrollment period; or

(C) A court has ordered coverage be provided for a spouse or minor child under a covered employee's health benefit plan, and request for enrollment is made within thirty (30) days after issuance of the court order;

(16) "New business premium rate" means, for each class of business as to a rating period, the lowest premium rate charged, offered or that could have been charged by a small employer carrier to small employers with similar case characteristics for newly issued health benefit plans with the same or similar coverage;

(17) [Deleted by 2011 amendment.]

(18) "Preexisting conditions provision" means a policy provision that limits or excludes coverage for charges or expenses incurred during a specified period following the insured's effective date of coverage, for a condition that, during a specified period immediately preceding the effective date of coverage, had manifested itself in a manner that would cause an ordinarily prudent person to seek diagnosis, care or treatment, or for which medical advice, diagnosis, care or treatment was recommended or received as to that condition or as to pregnancy existing on the effective date of coverage;

(19) "Premium" includes insurance premiums or other fees charged for a health benefit plan, including the costs of benefits paid or reimbursements made to or on behalf of persons covered by the plan;

(20) "Rating period" means the calendar period for which premium rates established by a small employer carrier are assumed to be in effect, as determined by the small employer carrier;

(21) [Deleted by 2011 amendment.]

(22) [Deleted by 2011 amendment.]

(23) "Small employer" means any person actively engaged in business that, on at least fifty percent (50%) of its working days during the preceding year, employed no fewer than three (3) eligible employees and no more than twenty-five (25) eligible employees, the majority of whom are employed within this state; provided, however, that for purposes of participating in a health group cooperative, a "small employer" includes any person that, during the preceding year, employed no less than two (2) and no more than fifty (50) eligible employees and otherwise qualifies as a small employer pursuant to this subdivision (23). "Small employer" includes companies that are affiliated companies, as defined in SC 56-13-102, or that are eligible to file a combined tax return under the Internal Revenue Code, compiled in title 26 of the United States Code. Except as otherwise provided, the provisions of this part that apply to a small employer shall continue to apply until the plan anniversary following the date the employer no longer meets the requirements of this section; and

(24) "Small employer carrier" means any carrier that offers health benefit plans covering eligible employees of one (1) or more small employers;

(25) [Deleted by 2011 amendment.]

History: Acts 1992, ch. 808, SC 3; 2008, ch. 1036, SCSC 1, 2; 2011, ch. 344, SC 1.