Under the Affordable Care Act, the 'guaranteed issue' requirement for small group health plans means that:
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
Guaranteed issue is a core ACA consumer protection. In the small group market, carriers must offer coverage to and accept every eligible employer group that applies, without medical underwriting and without regard to the health status of the employees or their dependents. This ban on health-status denials replaced the prior practice of declining coverage to groups with known medical problems or rating them based on the group's experience. Combined with modified community rating, guaranteed issue ensures that small employers can obtain coverage regardless of who works for them. It is a standard PPACA exam point.
Why the other options are wrong
- B) Rejecting a group because employees have preexisting conditions is exactly what guaranteed issue prohibits. Medical underwriting may not be used to deny issuance in the small group market.
- C) The ACA's modified community rating bars premium variation based on claims history or health status for small groups. Only limited factors such as age, tobacco use, family size, and geography may vary rates.
- D) Guaranteed issue applies to small groups of 2 to 100 employees in California. It is not limited to groups with more than 50 employees, which would exclude most small businesses.
Memory hook
Guaranteed issue = every group gets in the door, healthy or sick, no underwriting bouncer.