(1) A health benefit plan subject to the Small Employer Health Insurance Availability Act shall be renewable with respect to all eligible employees or dependents, at the option of the small employer, except in any of the following cases:

(a) The small employer has failed to pay premiums or contributions in accordance with the terms of the health benefit plan or the health carrier has not received timely premium payments;

(b)(i) Fraud or misrepresentation of the small employer or, with respect to coverage of individual insureds, the insureds, or their representatives; or

(ii) The small employer has performed an act or practice that constitutes fraud or made an intentional misrepresentation of material fact under the terms of the coverage;

(c) Noncompliance with the small employer carrier‘s minimum participation requirements;

(d) Noncompliance with the small employer carrier’s employer contribution requirements;

(e) A decision by the small employer carrier to discontinue offering a particular type of group health benefit plan in the state‘s small employer market. A type of health benefit plan may be discontinued by the small employer carrier in that market only if the small employer carrier:

(i) Provides advance notice of its decision to the commissioner of insurance in each state in which it is licensed;

(ii) Provides notice of the decision not to renew coverage to all affected small employers, participants, and beneficiaries, and to the commissioner of insurance in each state in which an affected insured individual is known to reside, at least one hundred eighty days prior to the nonrenewal of any health benefit plans by the small employer carrier. Notice to the director shall be provided at least three working days prior to the notice to the affected small employers, participants, and beneficiaries;

(iii) Offers to each small employer provided the type of group health benefit plan the option to purchase all other health benefit plans currently being offered by the small employer carrier to small employers in the state; and

(iv) In exercising the option to discontinue the particular type of group health benefit plan and in offering the option of coverage under subdivision (1)(e)(iii) of this section, acts uniformly without regard to the claims experience of those small employers 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;

(f) A decision by the small employer carrier to discontinue offering and to nonrenew all its health benefit plans delivered or issued for delivery to small employers in this state. In such a case the small employer carrier shall:

(i) Provide advance notice of its decision to the commissioner of insurance in each state in which it is licensed;

(ii) Provide notice of the decision not to renew coverage to all affected small employers, participants, and beneficiaries, and to the commissioner of insurance in each state in which an affected insured individual is known to reside, at least one hundred eighty days prior to the nonrenewal of any health benefit plans by the small employer carrier. Notice to the director shall be provided at least three working days prior to the notice to the affected small employers, participants, and beneficiaries; and

(iii) Discontinue all health insurance issued or delivered for issuance in the state’s small employer market and not renew coverage under any health benefit plan issued to a small employer; and

(g) The director finds that the continuation of the coverage would:

(i) Not be in the best interests of the policyholders or certificate holders; or

(ii) Impair the carrier’s ability to meet its contractual obligations.

In such instance the director shall assist affected small employers in finding replacement coverage.

(2) A small employer carrier that elects not to renew a health benefit plan shall be prohibited from writing new business in the small employer market in this state for a period of five years from the date of notice to the director.

(3) In the case of a small employer carrier doing business in one established geographic service area of the state, the rules set forth in this section shall apply only to the carrier’s operations in that service area.

(4) A small employer carrier offering coverage through a network plan shall not be required to offer coverage or accept applications pursuant to subsection (1) or (2) of this section in the case of the following:

(a) To an eligible person who no longer resides, lives, or works in the service area of the small employer carrier or in an area for which the small employer carrier is authorized to do business, but only if coverage is terminated under this section uniformly without regard to any health-status-related factor of covered individuals; or

(b) To a small employer that no longer has any enrollee in connection with such plan who lives, resides, or works in the service area of the small employer carrier or the area for which the small employer carrier is authorized to do business.