TCA § 56-7-2208 — Formation of health group cooperative of small employers — Registration — Organization

A health group cooperative of small employers may be formed only for the purpose of obtaining insurance. A health group cooperative shall: Contain at least one thousand (1,000) eligible employees or have at least ten (10) participating employers; 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; Hold an open enrollment period at least once a year during which period eligible employers and eligible employees may join the health group cooperative; 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; 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); 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 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: Each member small employer separately is subject to the laws governing small employer health insurance; and 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. 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). 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. 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.