Current through Register Vol. 42, No. 11, August 30, 2024
(a) Subject to Subdivision (1) of Subsection
(a) of Section 7, each small employer carrier shall actively market all health
benefit plans sold by the carrier to eligible small employers in the
state.
(b)
(1) Except as provided in Subdivision (2), no
small employer carrier or producer shall, directly or indirectly, engage in the
following activities:
a. Encouraging or
directing small employers to refrain from filing an application for coverage
with the small employer carrier because of the health status, claims
experience, industry, occupation or geographic location of the small
employer.
b. Encouraging or
directing small employers to seek coverage from another carrier because of the
health status, claims experience, industry, occupation or geographic location
of the small employer.
(2) The provisions of Subdivision (1) shall
not apply with respect to information provided by a small employer carrier or
producer to a small employer regarding the established geographic service area
or a restricted network provision of a small employer carrier.
(c)
(1) Except as provided in Subdivision (2), no
small employer carrier shall, directly or indirectly, enter into any contract,
agreement or arrangement with a producer that provides for or results in the
compensation paid to a producer for the sale of a health benefit plan to be
varied because of the initial or renewal health status, claims experience,
industry, occupation or geographic location of the small employer.
(2) Subdivision (1) shall not apply with
respect to a compensation arrangement that provides compensation to a producer
on the basis of percentage of premium, provided that the percentage shall not
vary because of the health status, claims experience, industry, occupation or
geographic area of the small employer.
(d) No small employer carrier may terminate,
fail to renew or limit its contract or agreement of representation with a
producer for any reason related to the initial or renewal health status, claims
experience, occupation or geographic location of the small employers placed by
the producer with the small employer carrier.
(e) A small employer carrier or producer may
not induce or otherwise encourage a small employer to separate or otherwise
exclude an employee or dependent from health coverage or benefits provided in
connection with the employee's employment.
(f) Denial by a small employer carrier of an
application for coverage from a small employer shall be in writing and shall
state the reason or reasons for the denial.
(g)
(1) A
violation of this section by a small employer carrier or a producer shall be
considered an unfair trade practice pursuant to Section
27-12-2, Code of Ala.
1975.
(2) If a small
employer carrier enters into a contract, agreement or other arrangement with a
third-party administrator to provide administrative, marketing or other
services related to the offering of health benefit plans to small employers in
this state, the third-party administrator shall be subject to this section as
if it were a small employer carrier.
Author: Reyn Norman, Associate
Counsel
Statutory Authority:
Code of Ala.
1975, §
27-52-21.
