The national Group Health Insurance guide covers master policies and certificates, eligibility, contributory and noncontributory plans, coordination of benefits, and federal COBRA. Alaska's group and small-employer rules are in AS 21.54 and AS 21.56, with a few marketing rules in AS 21.36. Alaska questions focus on the small employer definition and what insurers and producers may not do when selling to small employers.

Group policy requirements

• Certificates. The insurer must give the policyholder, for each covered employee or member, a statement summarizing the essential features of the coverage. Only one is needed per family unit (AS 21.54.010(2)).
• Statements by insured persons. Absent fraud, statements are representations. A statement can't void coverage or reduce benefits unless it is in a written instrument signed by the person, and a copy was furnished to the person (AS 21.54.010(1)).
• No forced provider. A health policy may not require services from a particular hospital or person, except for HMOs (AS 21.54.020).
• Renewability. A group health care insurer must renew at the plan sponsor's option. The exceptions are listed reasons such as nonpayment, fraud, failure to meet participation or contribution rules, and market withdrawal (AS 21.54.130(a)).
• Discontinuing a product. An insurer that discontinues a type of group plan must give affected sponsors and participants written notice at least 180 days before nonrenewal. It must also offer its other plans (AS 21.54.130(b)).
• Substance abuse offer. Group plans covering five or more employees must offer coverage for treatment of alcoholism or drug abuse (AS 21.42.365). Fraternal benefit societies are excepted.

Other group-type coverages

• Blanket health insurance covers a defined group by reference to the policyholder's activities (AS 21.54.070). Examples are a school's students, a sports team, a camp, a common carrier's passengers, or volunteers.
• Franchise health insurance covers five or more employees of an employer, or 10 or more members of a qualifying association or union, under individual policies with premiums remitted by the employer or association (AS 21.51.330).
• Selling association or union membership just to qualify someone for group insurance is a prohibited unfair marketing practice (AS 21.36.025).

Small employer health insurance

Definitions.

• A small employer averaged at least 2 but not more than 50 employees in the preceding calendar year and has at least 2 on the first day of the plan year (AS 21.54.500). An employer with 51 or more is a large employer.
• An eligible employee works full time with a normal work week of 30 or more hours (AS 21.56.250). Part-time, temporary, and substitute employees are not eligible employees.

What a small employer insurer must do.

• It must offer all health plans it actively markets to small employers, including a basic plan and a standard plan (AS 21.56.140(a)).
• It may not increase minimum participation or employer contribution requirements after accepting the employer. It also may not count employees with other creditable coverage against participation (AS 21.56.140(c)).
• An application may be denied only in writing, with reasons (AS 21.56.180(d)).

What insurers and producers may not do (AS 21.56.180).

• Producer compensation may not vary based on the employer's health status, claims experience, industry, occupation, size, or location. A uniform percentage of premium is allowed.
• No insurer, producer, MGA, or TPA may encourage a small employer to exclude an employee from coverage.

Federal rules

• COBRA continuation applies to employers with 20 or more employees.
• Employers covered by the Fair Labor Standards Act must give employees written notice of the Health Insurance Marketplace, possible premium tax credits, and how buying marketplace coverage affects the employer contribution (ACA 1512; 29 U.S.C. 218b).

Common exam traps

• Alaska's small employer range is 2 to 50.
• An eligible employee works 30+ hours a week.
• Small-group producer pay can't vary with the employer's health or claims.
• Product discontinuance requires 180 days' notice.
• Franchise insurance means individual policies, starting at 5 employees.