Under what circumstance may an insurer not refuse to renew a small employer health insurance plan?

An insurer may not refuse to renew a small employer health insurance plan based on overuse of medical services. This is grounded in the regulations that protect small employers from adverse actions taken by insurers merely due to the frequency or volume of claims made by their employees. The intent of this provision is to ensure that small employers do not face discrimination or financial hardship simply because their employees may have greater healthcare needs. Insurers are encouraged to maintain a sustainable and fair approach towards the insurance coverage of small businesses, despite the potential for higher costs associated with the overuse of medical services.

In contrast, underpayment of premiums can lead to a non-renewal because insurers rely on premium payments to fund the plan and mitigate risk. Changes in ownership may also affect the terms of a policy or the ability to renew it, particularly if the new ownership alters the risk profile of the business. Non-compliance with health insurance regulations is another valid reason for insurers to refuse renewal, as compliance is essential for maintaining the legality and financial integrity of the insured plan.