
From the U.S. Code Online via GPO Access
[wais.access.gpo.gov]
[Laws in effect as of January 23, 2000]
[Document not affected by Public Laws enacted between
  January 23, 2000 and December 4, 2001]
[CITE: 42USC300gg-12]

 
                 TITLE 42--THE PUBLIC HEALTH AND WELFARE
 
                    CHAPTER 6A--PUBLIC HEALTH SERVICE
 
   SUBCHAPTER XXV--REQUIREMENTS RELATING TO HEALTH INSURANCE COVERAGE
 
                      Part A--Group Market Reforms
 
    subpart 3--provisions applicable only to health insurance issuers
 
Sec. 300gg-12. Guaranteed renewability of coverage for employers 
        in group market
        

(a) In general

    Except as provided in this section, if a health insurance issuer 
offers health insurance coverage in the small or large group market in 
connection with a group health plan, the issuer must renew or continue 
in force such coverage at the option of the plan sponsor of the plan.

(b) General exceptions

    A health insurance issuer may nonrenew or discontinue health 
insurance coverage offered in connection with a group health plan in the 
small or large group market based only on one or more of the following:

                     (1) Nonpayment of premiums

        The plan sponsor has failed to pay premiums or contributions in 
    accordance with the terms of the health insurance coverage or the 
    issuer has not received timely premium payments.

                              (2) Fraud

        The plan sponsor has performed an act or practice that 
    constitutes fraud or made an intentional misrepresentation of 
    material fact under the terms of the coverage.

        (3) Violation of participation or contribution rules

        The plan sponsor has failed to comply with a material plan 
    provision relating to employer contribution or group participation 
    rules, as permitted under section 300gg-11(e) of this title in the 
    case of the small group market or pursuant to applicable State law 
    in the case of the large group market.

                     (4) Termination of coverage

        The issuer is ceasing to offer coverage in such market in 
    accordance with subsection (c) of this section and applicable State 
    law.

                  (5) Movement outside service area

        In the case of a health insurance issuer that offers health 
    insurance coverage in the market through a network plan, there is no 
    longer any enrollee in connection with such plan who lives, resides, 
    or works in the service area of the issuer (or in the area for which 
    the issuer is authorized to do business) and, in the case of the 
    small group market, the issuer would deny enrollment with respect to 
    such plan under section 300gg-11(c)(1)(A) of this title.

                  (6) Association membership ceases

        In the case of health insurance coverage that is made available 
    in the small or large group market (as the case may be) only through 
    one or more bona fide associations, the membership of an employer in 
    the association (on the basis of which the coverage is provided) 
    ceases but only if such coverage is terminated under this paragraph 
    uniformly without regard to any health status-related factor 
    relating to any covered individual.

(c) Requirements for uniform termination of coverage

             (1) Particular type of coverage not offered

        In any case in which an issuer decides to discontinue offering a 
    particular type of group health insurance coverage offered in the 
    small or large group market, coverage of such type may be 
    discontinued by the issuer in accordance with applicable State law 
    in such market only if--
            (A) the issuer provides notice to each plan sponsor provided 
        coverage of this type in such market (and participants and 
        beneficiaries covered under such coverage) of such 
        discontinuation at least 90 days prior to the date of the 
        discontinuation of such coverage;
            (B) the issuer offers to each plan sponsor provided coverage 
        of this type in such market, the option to purchase all (or, in 
        the case of the large group market, any) other health insurance 
        coverage currently being offered by the issuer to a group health 
        plan in such market; and
            (C) in exercising the option to discontinue coverage of this 
        type and in offering the option of coverage under subparagraph 
        (B), the issuer acts uniformly without regard to the claims 
        experience of those sponsors or any health status-related factor 
        relating to any participants or beneficiaries covered or new 
        participants or beneficiaries who may become eligible for such 
        coverage.

                 (2) Discontinuance of all coverage

        (A) In general

            In any case in which a health insurance issuer elects to 
        discontinue offering all health insurance coverage in the small 
        group market or the large group market, or both markets, in a 
        State, health insurance coverage may be discontinued by the 
        issuer only in accordance with applicable State law and if--
                (i) the issuer provides notice to the applicable State 
            authority and to each plan sponsor (and participants and 
            beneficiaries covered under such coverage) of such 
            discontinuation at least 180 days prior to the date of the 
            discontinuation of such coverage; and
                (ii) all health insurance issued or delivered for 
            issuance in the State in such market (or markets) are 
            discontinued and coverage under such health insurance 
            coverage in such market (or markets) is not renewed.

        (B) Prohibition on market reentry

            In the case of a discontinuation under subparagraph (A) in a 
        market, the issuer may not provide for the issuance of any 
        health insurance coverage in the market and State involved 
        during the 5-year period beginning on the date of the 
        discontinuation of the last health insurance coverage not so 
        renewed.

(d) Exception for uniform modification of coverage

    At the time of coverage renewal, a health insurance issuer may 
modify the health insurance coverage for a product offered to a group 
health plan--
        (1) in the large group market; or
        (2) in the small group market if, for coverage that is available 
    in such market other than only through one or more bona fide 
    associations, such modification is consistent with State law and 
    effective on a uniform basis among group health plans with that 
    product.

(e) Application to coverage offered only through associations

    In applying this section in the case of health insurance coverage 
that is made available by a health insurance issuer in the small or 
large group market to employers only through one or more associations, a 
reference to ``plan sponsor'' is deemed, with respect to coverage 
provided to an employer member of the association, to include a 
reference to such employer.

(July 1, 1944, ch. 373, title XXVII, Sec. 2712, as added Pub. L. 104-
191, title I, Sec. 102(a), Aug. 21, 1996, 110 Stat. 1964.)


                            Prior Provisions

    A prior section 2712 of act July 1, 1944, was successively 
renumbered by subsequent acts and transferred, see section 238k of this 
title.


                             Effective Date

    Section applicable with respect to group health plans, and health 
insurance coverage offered in connection with group health plans, for 
plan years beginning after June 30, 1997, except as otherwise provided, 
see section 102(c) of Pub. L. 104-191, set out as a note under section 
300gg of this title.

                  Section Referred to in Other Sections

    This section is referred to in section 300gg-41 of this title.
