Small business owners in California received extra protection under the law for their rights with group health insurance when the law AB 1672 was passed in 1992. This new requirement required that group health insurance carriers provide coverage for employees covered under a group health plan, even if they have a pre-existing condition. This new law meant that insurance companies may not deny coverage, and if there is an exclusion period for a pre-existing condition, it must be kept to six months to one year. If an employee was covered by a health plan before joining the group health plan offered by their new employer, this coverage must count towards this exclusion period, as long as the employee’s coverage was enacted within 62 days of losing the previous policy.
Under law AB 1672, a group health insurance provider must renew a group health plan for a small business, as long as two conditions are met: there has been no fraud with the policy and all the premiums have been paid. This prevents insurance companies from offering a small business a group health plan and then arbitrarily canceling it later on.
Tags: group health, pre-existing
