BULLETIN 1997-15

Issued by the Kansas Insurance Department, December 18, 1997

Kathleen Sebelius, Commissioner of Insurance

TO: All Companies Authorized To Transact Accident and Health Insurance In The State Of Kansas

SUBJECT: Purchase of Life Insurance In Conjunction With Health Insurance Coverage

It has been brought to our attention that a number of small employer group health insurers are requiring employers to purchase life insurance with the purchase of health insurance. Such practice appears to violate the provisions of Kassebaum/Kennedy Legislation and 1997 Kansas Senate Bill No. 204.

With the guarantee issue requirements of these laws, insurers cannot refuse to offer group health coverage to employer groups with 2-50 employees except as permitted by insurance law. Nothing in our insurance law allows small group insurers to require the purchase of life insurance coverage in conjunction with a company's sales to groups that fit within the small group category (2-50 employees). We fully understand that a number of small employer groups may want life insurance included with their health insurance coverage. In such cases, insurance companies should accommodate such requests for coverage. On the other hand, some employers may not want to provide life insurance coverage for their employees. As a result, we believe that insurers should advise small group employers in writing of their right to accept or reject such coverage.

At this time, we do not foresee the need to address this issue by the adoption of a regulation. However, if we find in the future that written communication hasn't been provided by your company to small group employers, advising of their right to refuse life insurance coverage, we will treat this matter as a violation of the unfair trade practices act.

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