Promoting accessibility and affordability of coverage in the small group market

Section 2711 of the Public Health Service Act (42 U.S.C. 300gg–11) is amended— (1)in subsection (a)(1), by striking (f) and inserting (g); and (2)by adding at the end the following new subsection:

(g)

Election of alternative to guaranteed issue requirement

(1)

Election

(A)

In general

A health insurance issuer may elect, with respect to any small employer (as defined in section 2791(e)(4)), to meet the requirements of paragraphs (2) and (3) instead of complying with the guaranteed issue requirement of subsection (a). (B)

Requirement of accepting or rejecting all eligible individuals within entire group at time of election

An election made under subparagraph (A) with respect to a small employer shall apply with respect to all eligible individuals of that small employer at the time of such election. (C)

Subsequent eligible individuals

In the case of an individual who becomes an eligible individual with respect to a small employer after an election has been made under subparagraph (A), the health insurance issuer is not required to provide group health insurance coverage for such individual. (2)

Portability for individuals covered

If an election is made under paragraph (1)(A) and under such election group health insurance coverage is provided by a health insurance issuer for an eligible individual of a small employer, the health insurance issuer shall guarantee continuation of coverage to the individual (and to covered dependents), through issuance of individual health insurance coverage, after the date the individual no longer qualifies as an eligible individual of such employer, at a rate that does not exceed 150 percent of the standard individual rate applicable to such individual coverage in the State in which the policy was initially issued. (3)

Information on elections

Any health insurance issuer making an election under paragraph (1)(A) shall furnish to the Secretary such information as the Secretary may require in order to monitor the impact of such election on access to, and affordability, of health insurance coverage in the small group market and in the individual market. Such information shall include at least information relating to the following: (A)

Rejection rate

The characteristics of small employers denied health insurance coverage because of this subsection. (B)

Premium rates

The rates charged for coverage offered under an election made under this subsection (in comparison to rates that are otherwise charged if this subsection were not in effect). (4)

Limitation

An election under paragraph (1)(A) may only be made with respect to coverage of a small employer under health insurance coverage that consists of a high deductible health plan (as defined in section 223(c)(2) of the Internal Revenue Code of 1986) and a contribution to a health savings account (as defined in section 223(d) of such Code). (5)

Report

At least 6 months before the end of the 5-year period beginning on the date of the enactment of this subsection, the Secretary shall submit to Congress a report on the impact of this subsection on the availability and affordability of health insurance coverage in the small group market and in the individual market. Such report shall include recommendations on whether this subsection should be extended beyond such period and whether it should be expanded to cover health insurance coverage in addition to the coverage described in paragraph (4). (6)

Contingent sunset

This subsection shall not apply to elections for small employers made by a health insurance issuer after the end of the 5-year period described in paragraph (5) if the Secretary, in the report to Congress under such paragraph, recommends that this subsection should not be extended beyond such period. If the Secretary makes such a recommendation, this subsection shall still continue to apply to elections made before the end of such 5-year period.