<html> <head> <meta name=Generator content="Microsoft Office HTML Filter 2.0"> <meta http-equiv=Content-Type content="text/html; charset=windows-1252"> <title>Rule 20:06:42 ASSOCIATIONS ELIGIBLE FOR GROUP HEALTH INSURANCE</title> <META NAME="Keywords" Content="Administrative Rules 20:06:42"> <META NAME="Description" Content="Administrative Rules 20:06:42 ASSOCIATIONS ELIGIBLE FOR GROUP HEALTH INSURANCE"> <style> <!-- --> </style> </head> <body lang=EN-US link=blue vlink=purple> <div> <p align=center><b>CHAPTER 20:06:42</b></p> <p align=center><b>&nbsp;</b></p> <p align=center><b>ASSOCIATIONS ELIGIBLE FOR GROUP HEALTH INSURANCE</b></p> <p>Section</p> <p><a href="DisplayRule.aspx?Rule=20:06:42:01">20:06:42:01</a>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Eligible associations defined.</p> <p><a href="DisplayRule.aspx?Rule=20:06:42:01.01">20:06:42:01.01</a>&nbsp;&nbsp; Notification to association members.</p> <p><a href="DisplayRule.aspx?Rule=20:06:42:02">20:06:42:02</a>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Credit unions.</p> </div> </body> </html> <br /><hr><br /><html> <head> <title>Rule 20:06:42:01 Eligible associations defined.</title> <META NAME="Keywords" Content="Administrative Rules 20:06:42:01"> <META NAME="Description" Content="Administrative Rules 20:06:42:01 Eligible associations defined."> <meta http-equiv=Content-Type content="text/html; charset=windows-1252"> <meta name=Generator content="Microsoft Word 15 (filtered)"> <style> <!-- /* Font Definitions */ @font-face {font-family:"Cambria Math"; panose-1:2 4 5 3 5 4 6 3 2 4;} /* Style Definitions */ p.MsoNormal, li.MsoNormal, div.MsoNormal {margin:0in; margin-bottom:.0001pt; text-align:justify; font-size:12.0pt; font-family:"Times New Roman",serif;} a:link, span.MsoHyperlink {color:blue; text-decoration:underline;} a:visited, span.MsoHyperlinkFollowed {color:purple; text-decoration:underline;} .MsoChpDefault {font-size:10.0pt;} @page WordSection1 {size:8.5in 11.0in; margin:1.0in 1.0in 1.0in 1.0in;} div.WordSection1 {page:WordSection1;} --> </style> </head> <body lang=EN-US link=blue vlink=purple> <div class=WordSection1> <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b>20:06:42:01.&nbsp;&nbsp;Eligible associations defined.</b> A bona fide association is a group of persons who have joined for some common purpose or goal. A bona fide association is eligible for the issuance of group health insurance if all of the following factors are met and filed for approval by the director:</p> <p class=MsoNormal>&nbsp;</p> <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (1)&nbsp;&nbsp;There is a shared or common purpose that is not generally applicable to the population at large;</p> <p class=MsoNormal>&nbsp;</p> <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (2)&nbsp;&nbsp;There is a constitution and by-laws which indicate a legitimate purpose other than the purchase of insurance with at least one substantial business purpose unrelated to obtaining insurance;</p> <p class=MsoNormal>&nbsp;</p> <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (3)&nbsp;&nbsp;The primary method of obtaining new members is not through, or in conjunction with, the solicitation of insurance. However, solicitation of insurance may be one of the methods of obtaining new members;</p> <p class=MsoNormal>&nbsp;</p> <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (4)&nbsp;&nbsp;If the association includes employer members, the following additional requirements apply:</p> <p class=MsoNormal>&nbsp;</p> <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (a)&nbsp;&nbsp;The functions and activities of the association are controlled by its employer members. The association's employer members that participate in the group health plan must control the plan in form and in substance;</p> <p class=MsoNormal>&nbsp;</p> <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (b)&nbsp;&nbsp;Employer members must be in the same trade, industry, line of business, or profession; and</p> <p class=MsoNormal>&nbsp;</p> <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (c)&nbsp;&nbsp;Each employer member has a principal place of business in the same geographic region.</p> <p class=MsoNormal>&nbsp;</p> <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; When determining eligibility for the issuance of group health insurance, the division may consider whether the association ever existed independently of an insurance product.</p> <p class=MsoNormal>&nbsp;</p> <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b>Source:</b> 26 SDR 44, effective October 6, 1999; 41 SDR 41, effective September 17, 2014; 45 SDR 158, effective June 27, 2019.</p> <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b>General Authority:</b> SDCL <A HREF="/statutes/DisplayStatute.aspx?Type=Statute&Statute=58-18-62">58-18-62</A>; <A HREF="/statutes/DisplayStatute.aspx?Type=Statute&Statute=58-18-79">58-18-79</A>, <A HREF="/statutes/DisplayStatute.aspx?Type=Statute&Statute=58-18-89">58-18-89.</A></p> <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b>Law Implemented:</b> SDCL <A HREF="/statutes/DisplayStatute.aspx?Type=Statute&Statute=58-18-3">58-18-3</A>, <A HREF="/statutes/DisplayStatute.aspx?Type=Statute&Statute=58-18-6">58-18-6</A>; <A HREF="/statutes/DisplayStatute.aspx?Type=Statute&Statute=58-18-88">58-18-88.</A></p> <p class=MsoNormal>&nbsp;</p> </div> </body> </html> <br /><hr><br /><html> <head> <title>Rule 20:06:42:01.01 Notification to association members.</title> <META NAME="Keywords" Content="Administrative Rules 20:06:42:01.01"> <META NAME="Description" Content="Administrative Rules 20:06:42:01.01 Notification to association members."> <meta http-equiv=Content-Type content="text/html; charset=windows-1252"> <meta name=Generator content="Microsoft Word 15 (filtered)"> <style> <!-- /* Font Definitions */ @font-face {font-family:"Cambria Math"; panose-1:2 4 5 3 5 4 6 3 2 4;} @font-face {font-family:Calibri; panose-1:2 15 5 2 2 2 4 3 2 4;} /* Style Definitions */ p.MsoNormal, li.MsoNormal, div.MsoNormal {margin-top:0in; margin-right:0in; margin-bottom:10.0pt; margin-left:0in; line-height:115%; font-size:11.0pt; font-family:"Calibri",sans-serif;} a:link, span.MsoHyperlink {color:blue; text-decoration:underline;} a:visited, span.MsoHyperlinkFollowed {color:purple; text-decoration:underline;} .MsoChpDefault {font-family:"Calibri",sans-serif;} .MsoPapDefault {margin-bottom:10.0pt; line-height:115%;} @page WordSection1 {size:8.5in 11.0in; margin:49.7pt 1.0in 49.7pt 63.35pt;} div.WordSection1 {page:WordSection1;} --> </style> </head> <body lang=EN-US link=blue vlink=purple> <div class=WordSection1> <p class=MsoNormal style='margin-bottom:0in;margin-bottom:.0001pt;text-align: justify;line-height:normal'><span style='font-size:12.0pt;font-family:"Times New Roman",serif'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span><b><span style='font-size:12.0pt;font-family:"Times New Roman",serif'>20</span></b><b><span style='font-size:12.0pt;font-family:"Times New Roman",serif'>:</span></b><b><span style='font-size:12.0pt;font-family:"Times New Roman",serif'>06</span></b><b><span style='font-size:12.0pt;font-family:"Times New Roman",serif'>:</span></b><b><span style='font-size:12.0pt;font-family:"Times New Roman",serif'>42</span></b><b><span style='font-size:12.0pt;font-family:"Times New Roman",serif'>:</span></b><b><span style='font-size:12.0pt;font-family:"Times New Roman",serif'>01.01</span></b><b><span style='font-size:12.0pt;font-family:"Times New Roman",serif'>.&nbsp;&nbsp;Notification to association members.</span></b><span style='font-size:12.0pt;font-family: "Times New Roman",serif'> Each application for insurance</span><span style='font-size:12.0pt;font-family:"Times New Roman",serif'> </span><span style='font-size:12.0pt;font-family:"Times New Roman",serif'>and each policy and certificate issued by an insurer through an association plan with employer</span><span style='font-size:12.0pt;font-family:"Times New Roman",serif'> </span><span style='font-size:12.0pt;font-family:"Times New Roman",serif'>members shall contain in ten-point type on the front page the following notice prominently</span><span style='font-size:12.0pt;font-family:"Times New Roman",serif'> </span><span style='font-size:12.0pt;font-family:"Times New Roman",serif'>displayed:</span></p> <p class=MsoNormal style='margin-bottom:0in;margin-bottom:.0001pt;text-align: justify;line-height:normal'><span style='font-size:12.0pt;font-family:"Times New Roman",serif'>&nbsp;</span></p> <p class=MsoNormal style='margin-bottom:0in;margin-bottom:.0001pt;text-align: justify;line-height:normal'><span style='font-size:12.0pt;font-family:"Times New Roman",serif'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span><span style='font-size:12.0pt;font-family:"Times New Roman",serif'>NOTICE</span></p> <p class=MsoNormal style='margin-bottom:0in;margin-bottom:.0001pt;text-align: justify;line-height:normal'><span style='font-size:12.0pt;font-family:"Times New Roman",serif'>&nbsp;</span></p> <p class=MsoNormal style='margin-top:0in;margin-right:0in;margin-bottom:0in; margin-left:27.0pt;margin-bottom:.0001pt;text-align:justify;text-indent:-27.0pt; line-height:normal'><span style='font-size:12.0pt;font-family:"Times New Roman",serif'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span><span style='font-size:12.0pt;font-family:"Times New Roman",serif'>This policy is issued through an association. By accepting coverage, you must</span><span style='font-size:12.0pt;font-family:"Times New Roman",serif'> </span><span style='font-size:12.0pt;font-family:"Times New Roman",serif'>participate in this plan for a minimum of three years to avoid penalties for early</span><span style='font-size:12.0pt;font-family:"Times New Roman",serif'> </span><span style='font-size:12.0pt;font-family:"Times New Roman",serif'>departure.</span></p> <p class=MsoNormal style='margin-bottom:0in;margin-bottom:.0001pt;text-align: justify;line-height:normal'><span style='font-size:12.0pt;font-family:"Times New Roman",serif'>&nbsp;</span></p> <p class=MsoNormal style='margin-bottom:0in;margin-bottom:.0001pt;text-align: justify;line-height:normal'><span style='font-size:12.0pt;font-family:"Times New Roman",serif'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b>Source:</b> 45 SDR 158, effective June 27, 2019.</span></p> <p class=MsoNormal style='margin-bottom:0in;margin-bottom:.0001pt;text-align: justify;line-height:normal'><span style='font-size:12.0pt;font-family:"Times New Roman",serif'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b>General Authority:</b> SDCL </span><span style='font-size:12.0pt;font-family:"Times New Roman",serif'>58-18-62, 58-18-79, 58-18-89.</span></p> <p class=MsoNormal style='margin-bottom:0in;margin-bottom:.0001pt;text-align: justify;line-height:normal'><span style='font-size:12.0pt;font-family:"Times New Roman",serif'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b>Law Implemented:</b> SDCL </span><span style='font-size:12.0pt;font-family:"Times New Roman",serif'>58-18-3, 58-18-6, 58-18-88</span><span style='font-size:12.0pt;font-family:"Times New Roman",serif'>.</span></p> <p class=MsoNormal style='margin-bottom:0in;margin-bottom:.0001pt;text-align: justify;line-height:normal'><span style='font-size:12.0pt;font-family:"Times New Roman",serif'>&nbsp;</span></p> </div> </body> </html> <br /><hr><br /><html> <head> <title>Rule 20:06:42:02 Credit unions.</title> <META NAME="Keywords" Content="Administrative Rules 20:06:42:02"> <META NAME="Description" Content="Administrative Rules 20:06:42:02 Credit unions."> <meta name=Generator content="Microsoft Office HTML Filter 2.0"> <meta http-equiv=Content-Type content="text/html; charset=windows-1252"> <meta name=Originator content="Microsoft Word 10"> <style> <!-- --> </style> </head> <body lang=EN-US> <div> <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b>20:06:42:02.&nbsp;&nbsp;Credit unions.</b> Credit unions formed pursuant to state or federal law are associations eligible for the issuance of group health insurance.</p> <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b>Source:</b> 26 SDR 44, effective October 6, 1999.</p> <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b>General Authority:</b> SDCL <A HREF="/statutes/DisplayStatute.aspx?Type=Statute&Statute=58-18-62">58-18-62.</A></p> <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b>Law Implemented:</b> SDCL <A HREF="/statutes/DisplayStatute.aspx?Type=Statute&Statute=58-18-3">58-18-3</A>, <A HREF="/statutes/DisplayStatute.aspx?Type=Statute&Statute=58-18-6">58-18-6.</A></p> </div> </body> </html>