Professional Documents
Culture Documents
CHAPTER 509
GROUP INSURANCE
Referred to in §87.4, 296.7, 331.301, 364.4, 505.28, 505.29, 505.32, 507B.4A, 508A.5, 509B.1, 510.11, 513C.10, 514C.1, 514C.2, 514C.3A,
514C.4, 514C.6, 514C.10, 514C.11, 514C.12, 514C.18, 514C.19, 514C.20, 514C.21, 514C.23, 514C.24, 514C.25, 514C.26, 514C.29, 514C.30,
514E.1, 514E.2, 514F.4, 514L.1, 669.14, 670.7
Tue Feb 06 09:40:28 2018 Iowa Code 2018, Chapter 509 (22, 2)
§509.1, GROUP INSURANCE 2
Tue Feb 06 09:40:28 2018 Iowa Code 2018, Chapter 509 (22, 2)
3 GROUP INSURANCE, §509.1
a. The members eligible for insurance under the policy shall be all of the members of
the union or all of any class or classes thereof determined by conditions pertaining to their
employment, or to membership in the union, or both.
b. The premium for the group life policy shall be paid by the policyholder, either wholly
from the union’s funds, or partly from such funds and partly from funds contributed by the
insured members specifically for their insurance. No policy, except accident and health, may
be issued on which the entire premium is to be derived from funds contributed by the insured
members specifically for their insurance. A policy on which part of the premium is to be
derived from funds contributed by the insured members specifically for their insurance may
be placed in force only if at least sixty-five percent of the then eligible members, 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 members specifically for their insurance must insure
all eligible members, 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 members at date of issue.
d. The amounts of insurance under the policy must be based upon some plan precluding
individual selection either by the members or by the union.
e. Policies may include dependents of the insured, including the spouse.
f. The policy shall not exclude from coverage a member or a member’s spouse or
dependents on the basis of the eligibility of the member or the member’s spouse or
dependents for medical assistance under chapter 249A.
5. A policy issued to the trustees of a fund established by two or more employers in the
same industry or by two or more labor unions or by one or more employers and by one or
more labor unions which trustees shall be deemed the policyholder, to insure employees of
the employers or members of the unions for the benefit of persons other than the employers
or the unions, subject to the following requirements:
a. The persons eligible for insurance shall be all of the employees of the employers
or all of the members of the unions, or all of any class or classes thereof determined by
conditions pertaining to their employment, or to membership in the unions, or both. The
policy may provide that the term “employees” shall include the individual proprietor or
partners if an employer is an individual proprietor or a partnership. The policy may provide
that the term “employees” shall include the trustees or their employees, or both, if their
duties are principally connected with such trusteeship. The policy may provide that the term
“employees” shall include retired employees. The policy may also provide that the term
“employees” shall include the board of directors if the employer is a corporation.
b. The premium for the policy shall be paid by the trustees wholly from funds established
by the employers of the insured persons. The policy must insure all eligible persons, or all
except any as to whom evidence of individual insurability is not satisfactory to the insurer, if
the funds are contributed wholly by the employer or unions.
c. The policy must cover at least one hundred persons at date of issue.
d. The amounts of insurance under the policy must be based upon some plan precluding
individual selection either by the insured persons or by the policyholder, employers, or
unions.
e. Policies may include dependents of the insured, including the spouse.
f. The policy shall not exclude from coverage an employee or member or an employee’s or
member’s spouse or dependents on the basis of the eligibility of the employee or member or
employee’s or member’s spouse or dependents for medical assistance under chapter 249A.
6. A policy issued to any nonprofit industrial association, which shall be deemed the
policyholder, incorporated for a period of at least ten years and organized for purposes other
than obtaining insurance, subject to the following requirements:
a. If two or more members of the association, or any class or classes of members thereof
determined by conditions pertaining to insurance, elect to insure their employees or any class
or classes of employees determined by conditions pertaining to employment; and
b. The total number of insured employees must not be less than one thousand, and of these
not less than seventy-five percent must be employees of members with at least twenty insured
Tue Feb 06 09:40:28 2018 Iowa Code 2018, Chapter 509 (22, 2)
§509.1, GROUP INSURANCE 4
employees each, and further, not more than ten percent may be employees of members with
less than ten insured employees each; and
c. The insurance premiums are paid by such members to the association; each member,
insofar as applicable to the member’s own employees, may collect part of the premium from
insured employees, and the method of apportionment of the premium payment between the
member and the member’s employees may be varied as among individual members; and
d. Not less than seventy-five percent of the eligible employees of each participating
member may be insured where the employees pay a part of the premium. The word
“employees” as used in this subsection shall also include the individual members and
employees of such association.
e. Policies may include dependents of the employees, including the spouse.
f. The policy shall not exclude from coverage an employee or an employee’s spouse
or dependents on the basis of the eligibility of the employee or the employee’s spouse or
dependents for medical assistance under chapter 249A. This paragraph shall also apply to
corporations operating within the state who provide insurance coverage for their employees
directly, and the commissioner shall have the authority to enforce the provisions of this
paragraph.
7. A policy issued to the department of human services, which shall be deemed the
policyholder, to insure eligible persons for medical assistance, or for both mandatory medical
assistance and optional medical assistance, as defined by chapter 249A as hereafter amended.
8. A policy of group health insurance coverage, as defined in section 513B.2, issued by a
small employer carrier, as defined in section 513B.2, to a bona fide association, subject to the
following requirements:
a. The policy provides group health insurance coverage to eligible employees of members
of a bona fide association that are small employers as defined in section 513B.2, and to the
spouses and dependents of such employees.
b. The policy is issued to a bona fide association. For the purposes of this subsection, a
bona fide association is an association which meets all of the following requirements:
(1) The association is a trade, industry, or professional association which is organized in
good faith as a nonprofit corporation under chapter 504 for purposes other than obtaining
insurance and has been in existence and actively maintained for at least five continuous years
at the time the policy is issued.
(2) The association does not condition membership in the association on the health status
of employees of its members or the health status of the spouses and dependents of such
employees.
(3) Group health insurance coverage offered by the association is available to all eligible
employees of its members that are small employers as defined in section 513B.2 who choose
to participate in the health insurance coverage offered, and to the spouses and dependents
of such employees, regardless of the health status of such employees or their spouses and
dependents.
(4) Group health insurance coverage offered by the association is available only to persons
who are eligible employees of a small employer as defined in section 513B.2 that is a member
of the association, or to the spouses or dependents of such employees.
9. A policy issued to a resident of this state under a group life, accident, or health insurance
policy issued to a group other than one described in subsections 1 through 8, subject to the
following requirements:
a. The commissioner determines that all of the following apply:
(1) The issuance of the group policy is not contrary to the best interest of the public.
(2) The issuance of the group policy will result in economies of acquisition or
administration.
(3) The benefits under the group policy are reasonable in relation to the premium charged.
b. The commissioner need not make a determination under paragraph “a” if the
commissioner determines that the group insurance coverage offered in this state by an
insurer or other person is offered under a policy issued in another state and that state or
another state in which the policy is offered, having requirements substantially similar to
those in paragraph “a”, has determined that the policy meets those requirements.
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5 GROUP INSURANCE, §509.2
c. The premium for the policy shall be paid either from the policyholder’s funds, or from
funds contributed by the covered person, or both.
d. The insurer may exclude or limit the coverage on any person as to whom evidence of
individual insurability is not satisfactory to the insurer.
e. If compensation of any kind will or may be paid to the policyholder in connection
with the group policy, the insurer shall provide to the prospective insured written notice that
compensation will or may be paid. Notice shall be provided whether the compensation is
direct or indirect, and whether the compensation is paid to or retained by the policyholder,
or paid to or retained by a third party at the direction of the policyholder or any entity
affiliated with the policyholder by ownership, contract, or employment. The notice shall be
placed on or accompany any document designed for the enrollment of prospective insureds.
[C24, 27, 31, §8675, 8676; C35, §8684-e1 – 8684-e3; C39, §8684.01 – 8684.03; C46, §509.1 –
509.3; C50, 54, 58, 62, 66, 71, 73, 75, 77, 79, 81, §509.1]
83 Acts, ch 96, §157, 159; 85 Acts, ch 69, §1; 87 Acts, ch 63, §1; 91 Acts, ch 244, §25; 92 Acts,
ch 1162, §11; 2006 Acts, ch 1117, §33; 2007 Acts, ch 57, §1, 2, 8; 2012 Acts, ch 1023, §108;
2013 Acts, ch 138, §75; 2017 Acts, ch 29, §145
Referred to in §513B.2
Subsection 6, unnumbered paragraph 1 amended
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§509.2, GROUP INSURANCE 6
made in the event the age of a person insured has been misstated, such provision to contain
a clear statement of the method of adjustment to be used.
6. A provision that any sum becoming due by reason of the death of the person insured
shall be payable to the beneficiary designated by the person insured, subject to the provisions
of the policy in the event there is no designated beneficiary, as to all or any part of such sum,
living at the death of the person insured, and subject to any right reserved by the insurer in
the policy and set forth in the certificate to pay at its option a part of such sum, not exceeding
five hundred dollars, to any person appearing to the insurer to be equitably entitled thereto
by reason of having incurred funeral or other expenses incident to the last illness or death of
the person insured.
7. A provision that the insurer will issue to the policyholder for delivery to each person
insured an individual certificate setting forth a statement as to the insurance protection to
which the person is entitled, to whom the insurance benefits are payable, and the rights and
conditions set forth in subsections 8 to 10, inclusive, following if applicable.
8. A provision that if the insurance, or any portion of it, on a person covered under the
policy ceases because of termination of employment or of membership in the class or classes
eligible for coverage under the policy, such person shall be entitled to have issued to the
person by the insurer, without evidence of insurability, an individual policy of life insurance
without disability or other supplementary benefits, provided application for the individual
policy shall be made, and the first premium paid to the insurer, within thirty-one days after
such termination, and provided further that,
a. The individual policy shall, at the option of such person, be on any one of the forms,
except term insurance, then customarily issued by the insurer at the age and for the amount
applied for;
b. The individual policy shall be in an amount not in excess of the amount of life insurance
which ceases because of such termination, provided that any amount of insurance which
matures on the date of such termination, or has matured prior thereto as an endowment
payable to the person insured, whether in one sum or in installments or in the form of an
annuity, shall not, for the purposes of this provision, be included in the amount which is
considered to cease because of such termination, and
c. The premium on the individual policy shall be at the insurer’s then customary rate
applicable to the form and amount of the individual policy, to the class of risk to which such
person then belongs, and to the person’s age attained on the effective date of the individual
policy.
9. A provision that if the group policy terminates or is amended so as to terminate the
insurance of any class of insured persons, every person insured thereunder at the date of such
termination whose insurance terminates and who has been so insured for at least five years
prior to such termination date shall be entitled to have issued to the person by the insurer
an individual policy of life insurance, subject to the same conditions and limitations as are
provided by subsection 8 above, except that the group policy may provide that the amount of
such individual policy shall not exceed the smaller of the amount of the person’s life insurance
protection ceasing because of the termination or amendment of the group policy, less the
amount of any life insurance for which the person is or becomes eligible under any group
policy issued or reinstated by the same or another insurer within thirty-one days after such
termination, and two thousand dollars.
10. A provision that if a person insured under the group policy dies during the period
within which the person would have been entitled to have an individual policy issued to
the person in accordance with subsection 8 or 9 above and before such an individual policy
shall have become effective, the amount of life insurance which the person would have been
entitled to have issued to the person under such individual policy shall be payable as a claim
under the group policy, whether or not application for the individual policy or the payment
of the first premium therefor has been made.
[C24, 27, 31, §8677, 8678; C35, §8684-e4, -e5; C39, §8684.04, 8684.05; C46, §509.4, 509.5;
C50, 54, 58, 62, 66, 71, 73, 75, 77, 79, 81, §509.2]
Referred to in §508A.5, 509.4, 509.10, 509.14
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7 GROUP INSURANCE, §509.3
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§509.3, GROUP INSURANCE 8
individual or group conversion policies, or policies under Tit. XVIII of the Social Security
Act, or any other similar coverage under a state or federal government plan.
g. A provision shall be made available to policyholders, under group policies covering
hospital, medical, or surgical expenses, for payment of covered services determined to
be medically necessary provided by registered nurses certified by a national certifying
organization, which organization shall be identified by the Iowa board of nursing pursuant
to rules adopted by the board, if the services are within the practice of the profession of
a registered nurse as that practice is defined in section 152.1, under terms and conditions
agreed upon between the insurer and the policyholder, subject to utilization controls. This
paragraph shall not require payment for nursing services provided by a certified nurse
practicing in a hospital, nursing facility, health care institution, physician’s office, or other
noninstitutional setting if the certified nurse is an employee of the hospital, nursing facility,
health care institution, physician, or other health care facility or health care provider. This
paragraph applies to group policies delivered or issued for delivery in this state on or after
July 1, 1989, and to existing group policies on their next anniversary or renewal dates,
or upon expiration of the applicable collective bargaining contract, if any, whichever is
later. This paragraph does not apply to blanket, short-term travel, accident-only, limited or
specified disease, or individual or group conversion policies, policies rated on a community
basis, or policies designed only for issuance to persons for eligible coverage under Tit. XVIII
of the federal Social Security Act, or any other similar coverage under a state or federal
government plan.
h. A provision that the insurer will permit continuation of existing coverage or
reenrollment in previously existing coverage for an individual who meets the requirements
of section 513B.2, subsection 14, paragraph “a”, “b”, “c”, “d”, or “e”, and who is an unmarried
child of an insured or enrollee who so elects, at least through the policy anniversary date on
or after the date the child marries, ceases to be a resident of this state, or attains the age of
twenty-five years old, whichever occurs first, or so long as the unmarried child maintains
full-time status as a student in an accredited institution of postsecondary education.
2. In addition to the provisions required in subsection 1, paragraphs “a” through “h”, the
commissioner shall require provisions through the adoption of rules implementing the federal
Health Insurance Portability and Accountability Act, Pub. L. No. 104-191.
[C24, 27, 31, §8677, 8678; C35, §8684-e4, -e6; C39, §8684.04, 8684.06; C46, §509.4, 509.6;
C50, 54, 58, 62, 66, 71, 73, 75, 77, 79, 81, §509.3]
83 Acts, ch 166, §1; 84 Acts, ch 1290, §1; 86 Acts, ch 1124, §8; 86 Acts, ch 1180, §2; 89 Acts,
ch 164, §2; 97 Acts, ch 103, §1; 99 Acts, ch 75, §2; 2005 Acts, ch 70, §7; 2008 Acts, ch 1088,
§125; 2008 Acts, ch 1188, §38, 43; 2009 Acts, ch 118, §7, 11; 2012 Acts, ch 1021, §98
Referred to in §509.10, 509.14, 514.21, 514.23
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9 GROUP INSURANCE, §509.9
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§509.10, GROUP INSURANCE 10
509.13 Rules.
The commissioner of insurance shall issue rules establishing minimum standards for
group Medicare supplement policies and minimum standards for benefits under coverages
contained in group Medicare supplement policies. These rules shall be consistent with those
rules established for individual Medicare supplement policies pursuant to chapter 514D. The
commissioner also shall establish by rule reasonable and creditable anticipated minimum
loss ratios for group Medicare supplement policies. Rules issued by the commissioner shall
give issuers of group Medicare supplement policies a reasonable time to achieve compliance.
[81 Acts, ch 167, §1]
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11 GROUP INSURANCE, §509.18
e. An individual accident and sickness policy shall be subject to the provisions of chapter
514A.
f. Premiums for such policies may be paid entirely from the funds of the association,
entirely from the funds of the members or partly from the funds of each.
g. Accident and sickness policies may include the spouse and dependents of the insured.
[C54, 58, 62, 66, 71, 73, 75, 77, 79, 81, §509.14]
Referred to in §509.19, 514D.3, 514D.4
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§509.19, GROUP INSURANCE 12
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