State RegulationsNY specificDifficulty 2/5
A small employer group in New York generated substantial claims during the policy year, and the renewal date is approaching. Under Reg 145, what may the carrier do at renewal?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
Under Reg 145 (11 NYCRR Part 360 (Reg 145)), small employer medical plans are guaranteed renewable, and an insurer may not refuse renewal because of the group's claims experience or health status. The carrier may adjust premiums prospectively within the limits New York law allows, but it cannot use a year of heavy claims as a reason to drop the group.
Why the other options are wrong
- B) An unfavorable year of claims is precisely the kind of claims-based reason that cannot support nonrenewal of a small employer group.
- C) Demanding that high-claim employees be dismissed or dropped is not a permissible renewal condition.
- D) Mid-term cancellation for claims reasons is not permitted; the group is entitled to renew at the renewal date.
Memory hook
Heavy claims are a pricing issue, not a cancellation right.