State RegulationsMI specificDifficulty 2/5
Which of the following would be a permissible basis for a Michigan carrier to decline renewal of a small-employer health benefit plan?
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Answer & full 3-part explanation (select an option above, or peek)
Why C is correct
M.C.L. 500.3711 permits nonrenewal of small-employer coverage only on grounds Michigan law allows, with nonpayment of premiums the classic example, while barring refusals tied to claims experience or the ordinary aging of dependents. A dependent reaching age 26 affects that individual's status under M.C.L. 500.3403, not the group's right to renewal.
Why the other options are wrong
- A) Claims experience is not a lawful nonrenewal ground for a guaranteed-renewable small group.
- B) One dependent's aging out at 26 changes that child's coverage under M.C.L. 500.3403, not the plan's renewal.
- D) The owner's Medicare eligibility does not relieve the carrier of its renewal obligation under M.C.L. 500.3711.
Memory hook
Nonpayment is the lawful no — claims and birthdays are not.