(a) A health group cooperative of small employers may be formed only for the purpose of obtaining insurance. A health group cooperative shall:
Terms Used In Tennessee Code 56-7-2208
Bankruptcy: Refers to statutes and judicial proceedings involving persons or businesses that cannot pay their debts and seek the assistance of the court in getting a fresh start. Under the protection of the bankruptcy court, debtors may discharge their debts, perhaps by paying a portion of each debt. Bankruptcy judges preside over these proceedings.
Case characteristics: means demographic or other objective characteristics of a small employer, as determined by a small employer carrier, that are considered by the small employer carrier in the determination of premium rates for the small employer, but does not mean claim experience, health status and duration of coverage since issue. See Tennessee Code 56-7-2203
cooperative: means a private purchasing cooperative composed of small employers formed under this part. See Tennessee Code 56-7-2203
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.
Person: means any association, aggregate of individuals, business, company, corporation, individual, joint-stock company, Lloyds-type organization, organization, partnership, receiver, reciprocal or interinsurance exchange, trustee or society. See Tennessee Code 56-16-102
small employer: includes any person that, during the preceding year, employed no less than two (2) and no more than fifty (50) eligible employees and otherwise qualifies as a small employer pursuant to this subdivision (18). See Tennessee Code 56-7-2203
State: when applied to the different parts of the United States, includes the District of Columbia and the several territories of the United States. See Tennessee Code 1-3-105
written: includes printing, typewriting, engraving, lithography, and any other mode of representing words and letters. See Tennessee Code 1-3-105
(1) Contain at least one thousand (1,000) eligible employees or have at least ten (10) participating employers;(2) 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 three (3) years, unless allowed to terminate participation because of a financial hardship affecting the employer as determined by rules governing termination promulgated by the commissioner. These rules shall include, at a minimum, that “financial hardship” means the initiation of bankruptcy proceedings or dissolution of the employer. No health group cooperative shall exclude a small employer that otherwise meets the requirements for membership on the basis of a health status-related factor, as defined in § 56-7-2802, in relation to the employee or a dependent of the employee;(3) Hold an open enrollment period at least once a year during which period eligible employers and eligible employees may join the health group cooperative;(4) Allow eligible employees and their dependents, upon initial enrollment and during subsequent open enrollment periods, to choose among health insurance plans from the insurer selected by and offered through the cooperative. A person covered by a health insurance plan offered through the cooperative that requires an enrollment period in excess of one (1) year is eligible to choose among available plans upon the completion of the enrollment period;(5) Offer coverage under all the selected insurers’ plans offered through the cooperative to all eligible employees of member small employers and their dependents. Coverage shall be offered to all employees of member small employers and their dependents except as provided in § 56-7-2207(a)(4);(6) Not assume any risk or form self-insurance plans among its members unless it complies with chapter 26, part 2 of this title; provided, however, that compliance with § 56-26-204(a)(1)(C) shall not be required of health cooperatives; and(7) Have the option of using any type of rating arrangement with the insurer selected by the cooperative. At the cooperative’s discretion, premiums may be paid to the health insurance plans by the cooperative or by member small employers. 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 base rate within the health group cooperative, adjusted for case characteristics as permitted by § 56-7-2207 and plan selection, and is subject to the laws governing group accident and health insurance.(b)(1) The health group cooperative, prior to offering any health insurance plan through the cooperative, and annually after the initial offering, shall register with the department and demonstrate continued compliance with subdivision (b)(2).(2) The health group cooperative shall be organized as a nonprofit corporation and have the rights and duties pursuant to the Tennessee Nonprofit Corporation Act, compiled in title 48, chapters 51-68. On receipt of a certificate of incorporation from the 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 commissioner. The board of directors shall file annually with the commissioner a statement of all amounts collected and expenses incurred for the preceding year.(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.
