110 STAT. 1964 PUBLIC LAW 104-191—AUG. 21, 1996 is denied or until the issuer has demonstrated to the applicable State authority, if required under applicable State law, that the issuer has sufficient financial reserves to underwrite additional coverage, whichever is later. An applicable State authority may provide for the application of this subsection on a service-area-specific basis. "(e) EXCEPTION TO REQUIREMENT FOR FAILURE TO MEET CER- TAIN MINIMUM PARTICIPATION OR CONTRIBUTION RULES. — "(1) IN GENERAL.— Subsection (a) shall not be construed to preclude a health insurance issuer from establishing employer contribution rules or group participation rules for the offering of health insurance coverage in connection with a group health plan in the small group market, as allowed under applicable State law. " (2) RULES DEFINED.— For purposes of paragraph (1)— "(A) the term 'employer contribution rule' means a requirement relating to the minimum level or amount of employer contribution toward the premium for enrollment of participants and beneficiaries; and "(B) the term 'group participation rule' means a requirement relating to the minimum number of participants or beneficiaries that must be enrolled in relation to a specified percentage or number of eligible individuals or employees of an employer. " (f) EXCEPTION FOR COVERAGE OFFERED ONLY TO BONA FIDE ASSOCIATION MEMBERS.— Subsection (a) shall not apply to health insurance coverage offered by a health insurance issuer if such coverage is made available in the small group market only through one or more bona fide associations (as defined in section 2791(d)(3)). 42 USC 300gg- "SEC. 2712. GUARANTEED RENEWABILITY OF COVERAGE FOR 12. EMPLOYERS IN THE GROUP MARKET. "(a) IN GENERAL.—Except as provided in this section, if a health insurance issuer offers hesdth insurance coverage in the small or large group market in connection with a group health plan, the issuer must renew or continue in force such coverage at the option of the plan sponsor of the plan. "(b) GENERAL EXCEPTIONS. —^A health insurance issuer may nonrenew or discontinue health insurance coverage offered in connection with a group health plan in the small or large group market based only on one or more of the following: "(1) NONPAYMENT OF PREMIUMS.— The plan sponsor has failed to pay premiums or contributions in accordance with the terms of the health insurance coverage or the issuer has not received timely premium payments. "(2) FRAUD. —T Tie plan sponsor has performed an act or practice that constitutes fraud or made an intentional misrepresentation of material fact under the terms of the coverage. "(3) VIOLATION OF PARTICIPATION OR CONTRIBUTION RULES. —The plan sponsor has failed to comply with a material plan provision relating to employer contribution or group participation rules, as permitted under section 2711(e) in the case of the small group market or pursuant to applicable State law in the case of the large group market. "(4) TERMINATION OF COVERAGE.— The issuer is ceasing to offer coverage in such market in accordance with subsection (c) and applicable State law.
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