H. B. 2392


(By Delegates Prunty, Caputo and Manchin)

[Introduced February 21, 2001 ; referred to the

Committee on Government Organization then Finance.]





A BILL to amend and reenact section two, article fourteen, chapter thirty-three of the code of West Virginia, one thousand nine hundred thirty-one, as amended; and to amend and reenact section two, article sixteen of said chapter, all relating to requiring insurance companies to offer accident and health and sickness insurance plans to sole proprietors at the same rates and terms as are offered to groups.

Be it enacted by the Legislature of West Virginia:

That section two, article fourteen, chapter thirty-three of the code of West Virginia, one thousand nine hundred thirty-one, as amended, be amended and reenacted; and that section two, article sixteen of said chapter be amended and reenacted, all to read as follows:

ARTICLE 14. GROUP LIFE INSURANCE.

§33-14-2. Employee groups.

The lives of a group of individuals may be insured under a policy issued to an employer, or to the trustees of a fund established by an employer, which employer or trustees shall be deemed are considered the policyholder, to insure employees of the employer for the benefit of persons other than the employer, subject to the following requirements:

(a) The employees eligible for insurance under the policy shall be all of the employees of the employer, or all of any class or classes thereof determined by conditions pertaining to their employment. The policy may provide that the term "employees" shall include the employees of one or more subsidiary corporations, and the employees, individual proprietors, and partners of one or more affiliated corporations, proprietors or partnerships if the business of the employer and of such the affiliated corporations, proprietors or partnerships is under common control through stock ownership, contract or otherwise. The policy may provide that the term "employees" shall include the individual proprietor or partners if the employer is an individual proprietor or a partnership. The policy may provide that the term "employees" shall include retired employees. No director of a corporate
employer shall be eligible for insurance under the policy unless such the person is otherwise eligible as a bona fide employee of the corporation by performing services other than the usual duties of a director. No individual proprietor or partner shall be eligible for insurance under the policy unless he or she is actively engaged in and devotes a substantial part of his or her time to the conduct of the business of the proprietor or partnership. A policy issued to trustees may provide that the term "employees" shall include the trustees or their employees, or both, if their duties are principally connected with such the trusteeship. A policy issued to insure the employees of a public body may provide that the term "employees" shall include elected or appointed officials.
(b) The premium for the policy shall be paid by the policyholder, either wholly from the employer's funds or funds contributed by him or partly from such funds and partly from funds contributed by the insured employees. No policy may be issued on which the entire premium is to be derived from funds contributed by the insured employees, except that the entire premium may be paid from funds contributed by the insured employees if the amount of insurance does not exceed one thousand dollars on the life of any
employee. A policy on which part of the premium is to be derived from funds contributed by the insured employees may be placed in force only if at least seventy-five percent of the then eligible employees, excluding any as to whom evidence of individual insurability is not satisfactory to the insurer, elect to make the required contributions. A policy on which no part of the premium is to be derived from funds contributed by the insured employees must insure all eligible employees, or all except any as to whom evidence of individual insurability is not satisfactory to the insurer.
(c) The policy must cover at least ten employees at date of issue, unless the policy is for a sole proprietorship, in which case the policy must cover the sole proprietor and any other employees, less than ten, designated by the sole proprietor, at the group rate available to groups of at least ten employees.

(d) The amounts of insurance under the policy must be based upon some plan precluding individual selection either by the employees or by the employer or trustees.

ARTICLE 16. GROUP ACCIDENT AND SICKNESS INSURANCE.

§33-16-2. Eligible groups.

Any insurer licensed to transact accident and sickness insurance in this state may issue group accident and sickness
policies coming within any of the following classifications:
(a) A policy issued to an employer, who shall be deemed is considered the policyholder, insuring at least ten employees of such an employer, for the benefit of persons other than the employer, unless the policy is for a sole proprietorship, in which case the policy must cover the sole proprietor and any other employees, less than ten, designated by the sole proprietor, at the group rate available to groups of at least ten employees, and conforming to the following requirements:

(1) If the premium is paid by the employer the group shall comprise all employees or all of any class or classes thereof determined by conditions pertaining to the employment, or

(2) If the premium is paid by the employer and employees jointly, or by the employees, the group shall comprise not less than seventy percent of all employees of the employer or not less than seventy-five percent of all employees of any class or classes thereof determined by conditions pertaining to the employment.

(3) The term "employee" as used herein shall be deemed is considered to include the officers, managers, and employees of the employer, the partners, if the employer is a partnership, the officers, managers, and employees of subsidiary or affiliated
corporations of a corporation employer, and the individual proprietors, partners and employees of individuals and firms, the business of which is controlled by the insured employer through stock ownership, contract or otherwise. The term "employer" as used herein may be deemed determined to include any municipal or governmental corporation, unit, agency or department thereof and the proper officers, as such, of any unincorporated municipality or department thereof, as well as private individuals, partnerships, sole proprietorships and corporations.
(b) A policy issued to an association which has a constitution and bylaws and which has been organized and is maintained in good faith for purposes other than that of obtaining insurance, insuring at least ten members of the association for the benefit of persons other than the association or its officers or trustees, as such;

(c) A policy issued to a college, school or other institution of learning or to the head or principal thereof, insuring at least ten students, or students and employees, of such the institution;

(d) A policy issued to or in the name of any volunteer fire department, insuring all of the members of such the department or all of any class or classes thereof against any one or more of the hazards to which they are exposed by reason of such the membership
but in each case not less than ten such members;
(e) A policy issued to any person or organization to which a policy of group life insurance may be issued or delivered in this state, to insure any class or classes of individuals that could be insured under such a group life policy.




NOTE: The purpose of this bill is to require insurance companies to offer accident and health and sickness insurance plans to sole proprietors at the same rates and terms as are offered to groups.

Strike-throughs indicate language that would be stricken from the present law, and underscoring indicates new language that would be added.