Delaware Code Title 18 Sec. 7204 – Establishment of classes of business
(a) A small employer carrier may establish more than 1 class of business only to reflect substantial differences in expected claims experience or administrative costs related to the following reasons:
(1) The small employer carrier uses more than 1 type of system for the marketing and sale of health benefit plans to small employers;
(2) The small employer carrier has acquired a class of business from another small employer carrier; or
(3) The small employer carrier provides coverage to 1 or more association groups that meet the requirements of § 3506 of this title.
Terms Used In Delaware Code Title 18 Sec. 7204
- Carrier: means any entity that provides health insurance in this State. See Delaware Code Title 18 Sec. 7202
- Case characteristics: means demographic or other objective characteristics of a small employer that are considered by the small employer carrier in the determination of premium rates for the small employer, provided that claim experience, health status and duration of coverage shall not be case characteristics for the purposes of this chapter. See Delaware Code Title 18 Sec. 7202
- Class of business: means all of a carrier's business unless more than 1 class is established pursuant to § 7204 of this title. See Delaware Code Title 18 Sec. 7202
- Commissioner: means the Insurance Commissioner of this State. See Delaware Code Title 18 Sec. 7202
- Small employer: means any person, firm, corporation, partnership or association that is actively engaged in business that, on at least 50% of its working days during the preceding calendar quarter, employed no more than 50 eligible employees, the majority of whom were employed within this State. See Delaware Code Title 18 Sec. 7202
- Small employer carrier: means a carrier that offers health benefit plans covering eligible employees of 1 or more small employers in this State. See Delaware Code Title 18 Sec. 7202
(b) A small employer carrier may establish no more than 9 classes of business under subsection (a) of this section, except as provided for in subsection (d) of this section.
(c) The Commissioner may establish regulations to provide for periods of transition in order for a small employer carrier to come into compliance with subsections (a) and (b) of this section in the instance of acquisition of a block of business from another small employer carrier.
(d) The Commissioner may approve the establishment of more than 9 classes of business upon a finding that such action would enhance the efficiency and fairness of the small employer marketplace.
(e) A small employer carrier shall not transfer a small employer involuntarily into or out of a class of business. A small employer carrier shall not offer to transfer a small employer into or out of a class of business unless such offer is made to transfer all small employers in the class of business without regard to case characteristics, claim experience, health status or duration of coverage since issue.