Common use of Minimum Participation Clause in Contracts

Minimum Participation. At all times during the term of the group policy, including all renewals and extensions, the policyholder must maintain a participation level equal to or in excess of the amounts or percentages stated as ‘Minimum Participation’ in the Schedule. • Verification of participation requirements. PacificSource may verify with the policyholder, at reasonable times that employee participation is in accordance with the terms of this policy. The policyholder agrees to provide census data, waivers of coverage, payroll records, time sheets, and/or other documents when requested by PacificSource for the purpose of confirming eligibility and participation levels of employees. • Employers with at least 51 eligible employees must enroll all eligible employees in an eligible category unless otherwise agreed to by PacificSource in writing. If PacificSource agrees to allow employees to decline coverage, then employees declining coverage must submit a written Waiver of Coverage at initial enrollment or at the time of disenrollment. The waiver must state that coverage is being declined in accordance with the terms of this policy. Failure to meet participation requirements will cause the policy’s premium to be adjusted accordingly, regardless of how long the policy has been in force. The premium adjustment will occur on the next monthly premium due date following 60 days’ notice by PacificSource. PREMIUM • Monthly premium. The monthly premium amounts and the required employer premium contribution amount or percentage for each member are included in the ‘Monthly Premium Information’ in the Schedule. • Premium modifications. PacificSource may modify premium rates on any renewal date by giving the group a 30 day prior written notice. The group may reject the modification by giving written notice to PacificSource at least 15 days before the modification is to take place. Rejection of any modification terminates this policy. Payment of premium after receiving notice of modification constitutes the policyholder’s acceptance of the change. • When premium is due. By the first day of each month while the group policy continues in effect, the policyholder will pay to PacificSource monthly premiums as follows: − Full monthly premium for each member who is enrolled for all or any part of the month except as provided below. − Prorated premium for each member who becomes enrolled after the first of the month in accordance with any policy provision that allows mid-month enrollment. The prorated premium is equal to 1/30 the full monthly premium, multiplied by the number of days remaining in the month from the date of enrollment. − Premium is not considered paid until PacificSource receives the full premium amount by check, money order, or an accepted electronic transaction. The policyholder is not the agent of PacificSource for the purpose of collecting premiums. • Premium tax and/or assessments. In the event your state or the federal government imposes a tax on premium received from your state sited policyholders, or an assessment is imposed, PacificSource reserves the right to increase such policyholders’ premium rates to include the amount of the premium tax or assessment. The increase in premium rates becomes effective on the date the tax or assessment is imposed on the premium of your state sited policyholders. • Grace period. There is a 30 day grace period for payment of each monthly premium. If premium is not paid within the grace period, PacificSource will cancel the group policy at the end of the grace period after the policyholder is notified in writing by PacificSource that premium is past due. (See General Policy Provisions - Term and Termination - Notice of termination.) The group’s coverage and all claim liability will end on the last day of the last month for which premiums were paid by the policyholder and accepted by PacificSource. If PacificSource deposits funds remitted by the policyholder after the grace period, that action does not automatically constitute reinstatement of an expired policy. Any premium deposited after the grace period will be refunded to the policyholder. • Reinstatement after grace period expires. If this policy is terminated for non-payment of premium, the policyholder may have the policy reinstated by remitting all past due premium within 15 days after the grace period ends. Reinstatement of this policy may not be made more than twice in one contract year. At its discretion, PacificSource may require that funds remitted by the policyholder to be in the form of a cashier’s check. Funds that are received by PacificSource after the 15 day reinstatement period will not be accepted for the purpose of reinstatement but will either be refunded to the policyholder or applied to claims expense paid by PacificSource after the policy’s coverage ended, if any. If the group health policy is terminated for non-payment of premium, the policyholder may reapply to PacificSource for a new group health policy at the next anniversary date of this policy. • When premium is mistakenly paid. PacificSource will refund to the policyholder premium that was paid in error but only to a maximum of two months’ premium and less any claims expense paid by PacificSource on behalf of the enrolled individual for which a refund is requested. All refund requests must be made in writing and payroll records may be required to substantiate the request. • Refund of unused premium. If for any reason the policyholder cancels coverage under this policy, the policyholder shall notify PacificSource on a timely basis. PacificSource will refund to the policyholder any unused premium received for the period of ineligibility. ‘Unused collected premium’ means that portion of any premium collected which is not used, on a pro rata basis to the beginning of the next billing cycle at the time of cancellation, by PacificSource to insure against loss when there is no risk of loss, or that portion of any collected premium which would have not been collected had the policyholder paid monthly. GENERAL POLICY PROVISIONS TERM AND TERMINATION • Policy term. The group policy becomes effective at 12:00:01 a.m. local time on the date written opposite ‘Group Effective Date’ in the Schedule, and continues in effect for a period of 12 months, provided premiums are paid when due and in the required amounts. The group policy is automatically renewed from month to month thereafter unless modified or terminated as described below. • Policy renewal. The policy is renewable with respect to all eligible members at the option of the policyholder, unless: − The policyholder fails to pay the required premium. Termination is effective on the last day of the last month for which premium was paid. − The policyholder with respect to coverage of individual members, or the policyholder’s or member’s representative engages in fraud or makes an intentional misrepresentation of a material fact as prohibited by the terms of this plan. − The number of members is less than the number or percentage of eligible employees required by the policy’s participation requirements. − The policyholder fails to maintain the minimum employer premium contribution required. − PacificSource elects not to renew all of its health benefit plans delivered or issued in the large group market in your state, provided the following condition is satisfied: ο Notice of the decision to all affected employers at least 180 days prior to the nonrenewal of any health benefit plans. − The employer no longer satisfies the definition of a large employer. − The Department of Insurance finds continuation of this policy’s coverage would not be in the interest of the members, or would impair PacificSource’s ability to meet contractual obligations. − In the case of a group health benefit plan that delivers covered services through a specified network of healthcare providers, there is no longer any member who lives, resides, or works in the service area of the provider network. − In the case of a health benefit plan that is offered in the group market only through one or more bona fide associations, the membership of an employer in the association ceases and the termination of coverage is not related to the health status of any member. − The policyholder terminates the policy on any premium due date with a 30 day prior written notice to PacificSource.

Minimum Participation. At all times during the term of the group policy, including all renewals and extensions, the policyholder must maintain a participation level equal to or in excess of the amounts or percentages stated as ‘Minimum Participation’ in the Schedule. • Verification of participation requirements. PacificSource may verify with the policyholder, at reasonable times times, that employee participation is in accordance with the terms of this policy. The policyholder agrees to provide census data, waivers of coverage, payroll records, time sheets, and/or other documents when requested by PacificSource for the purpose of confirming eligibility and participation levels of employees. • Employers with at least 51 eligible employees Small employers. Small employers must enroll all eligible employees, except for employees in an eligible category unless otherwise agreed covered by qualifying existing coverage, who may decline to by PacificSource in writingenroll. If PacificSource agrees to allow employees to To decline coverage, then employees declining coverage the employee must submit a written statement (Waiver of Coverage Coverage) to PacificSource at initial enrollment or at the time of disenrollment. The waiver must state that coverage enrollment is being declined in accordance with due to the terms existence of this policyother qualifying health coverage. (See Administrative Provisions – Special Enrollment Periods.) Employees declining coverage due to the existence of other qualifying health coverage as allowed above are not counted when determining if the minimum participation requirement is met. However, an employer that does not employ at least two eligible employees on the date which coverage takes effect, or on the plan’s anniversary date, does not meet participation requirements if there is only one employee under coverage. Failure to meet participation requirements will cause the policy’s premium policy to be adjusted accordingly, regardless of how long the policy has been in force. The premium adjustment will occur terminate on the next monthly premium due date following 60 days’ notice by PacificSourceannual renewal date. (See Term and Termination – Policy Renewal.) PREMIUM • Monthly premium. The monthly premium amounts and the required employer premium contribution amount or percentage for each member are included in the ‘Monthly Premium Information’ in the Schedule. • Premium modifications. Premium rates will only be modified once in a 12 month period (on the policy renewal date) unless there is a change in benefits mid-contract year that affects the cost of insurance. The policy renewal date is the first day of a contract year. PacificSource may modify premium rates on any renewal date by giving the group a 30 day prior written notice. The group may reject the modification by giving written notice to PacificSource at least 15 days before the modification is to take place. Rejection of any modification terminates this policy. Payment of premium after receiving notice of modification constitutes the policyholder’s acceptance of the change. • When premium is due. By the first day of each month while the group policy continues in effect, the policyholder will pay to PacificSource monthly premiums as follows: − Full monthly premium for each member who is enrolled for all or any part of the month except as provided below. − Prorated premium for each member who becomes enrolled after the first of the month in accordance with any policy provision that allows mid-month enrollment. The prorated premium is equal to 1/30 the full monthly premium, multiplied by the number of days remaining in the month from the date of enrollment. − Premium is not considered paid until PacificSource receives the full premium amount by check, money order, or an accepted electronic transaction. The policyholder is not the agent of PacificSource for the purpose of collecting premiums. • Premium tax and/or assessments. In the event your state or the federal government imposes a tax on premium received from your state sited policyholders, or an assessment is imposed, PacificSource reserves the right to increase such policyholders’ premium rates to include the amount of the premium tax or assessment. The increase in premium rates becomes effective on the date the tax or assessment is imposed on the premium of your state sited policyholders. • Grace period. There is a 30 day grace period for payment of each monthly premium. If premium is not paid within the grace period, PacificSource will cancel the group policy at the end of the grace period after the policyholder is notified in writing by PacificSource that premium is past due. (See General Policy Provisions - – Term and Termination - – Notice of termination.) The group’s coverage and all claim liability will end on the last day of the last month for which premiums were paid by the policyholder and accepted by PacificSource. If PacificSource deposits funds remitted by the policyholder after the grace period, that action does not automatically constitute reinstatement of an expired policy. Any premium deposited after the grace period will be refunded to the policyholder. • Reinstatement after grace period expires. If this policy is terminated for non-payment of premium, the policyholder may have the policy reinstated by remitting all past due premium within 15 days after the grace period ends. Reinstatement of this policy may not be made more than twice in one contract year. At its discretion, PacificSource may require that funds remitted by the policyholder to be in the form of a cashier’s check. Funds that are received by PacificSource after the 15 day reinstatement period will not be accepted for the purpose of reinstatement but will either be refunded to the policyholder or applied to claims expense paid by PacificSource after the policy’s coverage ended, if any. If the group health policy is terminated for non-payment of premium, the policyholder may reapply to PacificSource for a new group health policy at the next anniversary date of this policy. • When premium is mistakenly paid. PacificSource will refund to the policyholder premium that was paid in error but only to a maximum of two months’ premium and less any claims expense paid by PacificSource on behalf of the enrolled individual for which a refund is requested. All refund requests must be made in writing writing, and payroll records may be required to substantiate the request. • Refund of unused premium. If for any reason the policyholder cancels coverage under this policy, the policyholder shall notify PacificSource on a timely basis. PacificSource will refund to the policyholder any unused premium received for the period of ineligibility. ‘Unused collected premium’ means that portion of any premium collected which is not used, on a pro rata basis to the beginning of the next billing cycle at the time of cancellation, by PacificSource to insure against loss when there is no risk of loss, or that portion of any collected premium which would have not been collected had the policyholder paid monthly. GENERAL POLICY PROVISIONS TERM AND TERMINATION • Policy term. The group policy becomes effective at 12:00:01 a.m. local time on the date written opposite ‘Group Effective Date’ in the Schedule, and continues in effect for a period of 12 months, provided premiums are paid when due and in the required amounts. The group policy is automatically renewed from month to month thereafter unless modified or terminated as described below. • Policy renewal. The policy is renewable with respect to all eligible members at the option of the policyholder, unless: − The policyholder fails to pay the required premium. Termination is effective on the last day of the last month for which premium was paid. − The policyholder with respect to coverage of individual members, or the policyholder’s or member’s representative engages in fraud or makes an intentional misrepresentation of a material fact as prohibited by the terms of this plan. − The number of members is less than the number or percentage of eligible employees required by the policy’s participation requirements. − The policyholder fails to maintain the minimum employer premium contribution required. − When PacificSource elects not to renew all of its health benefit plans delivered or issued in the large small group market in your state, provided all of the following condition is conditions are satisfied: ο Advanced notice of the decision is provided to your state’s Department of Insurance and to all group policyholders; ο Notice of the decision to all affected employers at least 180 days prior to the nonrenewal of any health benefit plans. − The plans and notice to your state’s Director of the Department of Insurance at least three working days prior to the notice to the affected policyholder; and When the employer no longer satisfies the definition of a large small employer. − The Department of Insurance finds continuation of this policy’s coverage would not be in the interest of the members, or would impair PacificSource’s ability to meet contractual obligations. − In the case of a group health benefit plan that delivers covered services through a specified network of healthcare providers, there is no longer any member who lives, resides, or works in the service area of the provider network. − In the case of a health benefit plan that is offered in the group market only through one or more bona fide associations, the membership of an employer in the association ceases and the termination of coverage is not related to the health status of any member. − The policyholder terminates the policy on any premium due date with a 30 day prior written notice to PacificSource.