Insurers serving the small group market must accept all groups, regardless of their health status. The division reviews rates to ensure they meet standards that protect groups with older or less healthy employees. About 175,000, or 4.4 percent of Oregonians obtain their insurance from the small group market.
In the small group health insurance market, as in the individual market, the division must review and approve both the insurance contracts and the rates charged for the coverage provided. Provisions of Oregon law applicable to the small group market include:
Guaranteed issue. Insurers selling health insurance in the small group market must offer all of their small group products to all small groups on a "guaranteed issue" basis, meaning that each small group has access to all products offered to any other small group in the relevant service area. This requirement does not apply to coverage offered through a bona fide association. A group cannot be turned down based on the age, health, or claims experience of those covered.
Guaranteed renewability. Small employer plans are guaranteed renewable, meaning the coverage continues at the employer's option as long as the employer continues to make the required premium payments. As with individual insurers, a general exception from guaranteed renewability exists for an insurance company that chooses to withdraw from a particular geographic area or from the entire state.
Rating rules. Insurance companies must pool all of their small group employers when setting rates; thus, the rate charged to a business largely reflects medical claims for the entire small group market and not claims for that particular business.
*Rating factors. The law limits the factors that can be used to set rates. Factors that may be used include tobacco use, age, family size, and geographic location.
*Mandated benefits. All small group health insurance policies must include essential health benefits and certain mandated health benefits. Preventive benefits must be offered with no cost sharing.
Nondiscrimination. Both federal and state law prohibit health insurance companies from applying different eligibility rules, offering different health insurance benefits, or charging higher premium rates to individual employees within a small employer group on the basis of health status or other health-related factors, including claims experience, medical history, or genetic information.
Participation requirements. Health insurance companies may require small employers to pay some portion of their employees' health insurance premiums and may also require that a certain percentage of eligible employees participate in the plan. If an insurer requires 100 percent of eligible employees to participate in the plan, the insurer may not require a small employer to contribute more than 50 percent of the premium cost of an employee-only benefit plan.
*Requirement does not apply to grandfathered or transitional plans.