South Carolina Code 38-71-1345. Formation of health group cooperative; requirements; registration; organization as nonprofit corporation
(1) shall contain at least one thousand eligible employees or must have at least ten participating employers;
Terms Used In South Carolina Code 38-71-1345
- Accident and health insurance: means insurance of human beings against death or personal injury by accident, and each insurance of human beings against sickness, ailment, and any type of physical disability resulting from accident or disease, and prepaid dental service, but not including coverages required by the Workers' Compensation Law of this State. See South Carolina Code 38-1-20
- Board: means the board of directors of the program established pursuant to § 38-71-1410. See South Carolina Code 38-71-1330
- cooperative: means a private purchasing cooperative composed of small employers formed under this article. See South Carolina Code 38-71-1330
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- Department: means the Department of Insurance of South Carolina. See South Carolina Code 38-1-20
- Director: means the Director of the Department of Insurance of this State. See South Carolina Code 38-71-1330
- insurance: includes annuities. See South Carolina Code 38-1-20
- Insurer: means an entity that provides health insurance in this State. See South Carolina Code 38-71-1330
- Person: means a corporation, agency, partnership, association, voluntary organization, individual, or another entity, organization, or aggregation of individuals. See South Carolina Code 38-1-20
- plan: means any hospital or medical policy or certificate, major medical expense insurance, hospital or medical service plan contract, or health maintenance organization subscriber contract that provides benefits consisting of medical care provided directly through insurance or reimbursement, or otherwise and including items and services paid for medical care. See South Carolina Code 38-71-1330
- Small employer: means , in connection with a health insurance plan with respect to a calendar year and a plan year, any person, firm, corporation, partnership, association, or employer, as defined in Section 3(5) of the Employee Retirement Income Security Act of 1974, that is actively engaged in business that, on at least fifty percent of its working days during the preceding calendar year, employed no more than fifty eligible employees or employed an average of not more than fifty employees on business days during the preceding calendar year and who employs at least one employee on the first day of the plan year. See South Carolina Code 38-71-1330
- Small employer insurer: means an insurer that offers health insurance plans covering eligible employees of one or more small employers in this State. See South Carolina Code 38-71-1330
- Terminate: means the cancellation of the relationship between an insurance producer and the insurer or the termination of a producer's authority to transact insurance. See South Carolina Code 38-1-20
(2) shall establish requirements for membership. A small employer‘s participation in a cooperative is voluntary, but an employer electing to participate in a cooperative shall commit to purchasing coverage through the cooperative for five years, unless allowed to terminate because of a financial hardship affecting the employer as determined by rules governing termination adopted by the director. The health group cooperative may not exclude a small employer, which otherwise meets the requirements for membership, on the basis of claim experience or a health status-related factor, as defined in § 38-71-840, in relation to the employee or a dependent of the employee;
(3) shall hold an open enrollment period at least once a year during which new members may join the health group cooperative;
(4) shall allow eligible employees and their dependents, upon initial enrollment and during subsequent open enrollment periods, to choose among health insurance plans offered through the cooperative. A person covered by a health insurance plan offered through the cooperative, which requires an enrollment period in excess of one year, is eligible to choose among available plans upon the completion of the enrollment period;
(5) shall offer coverage under all plans offered through the cooperative to all eligible employees of member small employers and their dependents. Coverage must be offered to all employees of member small employers and their dependents except as provided in § 38-71-1370(B);
(6) does not assume any risk or form self-insurance plans among its members unless it complies with the provisions of Chapter 41 of this title;
(7) has the option of using any type of rating arrangement with the health insurance plans and, at its discretion, premiums may be paid to the health insurance plans by the cooperative, by member small employers, or by eligible employees and their dependents. A health insurance plan offered through the health group cooperative that rates:
(a) each member small employer separately is subject to the laws governing small employer health insurance; and
(b) the entire group as a whole shall charge each insured person based on a community rate within the health group cooperative, adjusted for case characteristics as permitted by § 38-71-940 and plan selection, and is subject to the laws governing group accident and health insurance.
(B)(1) The health group cooperative, before offering any health insurance plan through the cooperative, and annually after that time, shall register with the department and demonstrate continued compliance with the provisions of item (2).
(2) The health group cooperative:
(a) must be organized as a nonprofit corporation and have the rights and duties pursuant to the provisions of Chapter 31 of Title 33 (South Carolina Nonprofit Corporations Act). On receipt of a certificate of incorporation from the South Carolina Secretary of State, the cooperative shall file written notification of the receipt of the certificate and a copy of the cooperative’s organizational documents with the director. The board of directors shall file annually with the director a statement of all amounts collected and expenses incurred for the preceding year;
(b) or a member of the board of directors, the executive director, an employee, or an agent of a cooperative, is not liable for:
(i) an act performed in good faith in the execution of duties in connection with the cooperative; or
(ii) an independent action of a small employer insurer or a person who provides health care services under a health insurance plan; and
(c) or a member of the board of directors, the executive director, an employee, or an agent is not liable for failure to arrange for coverage of a particular illness, disease, or health condition.
(C) A small employer insurer may not form, or be a member of, a health group cooperative. An insurer may associate with a sponsoring entity, such as a business association, chamber of commerce, or other organization representing employers or serving an analogous function, to assist the sponsoring entity in forming a health group cooperative.