What action must an insurer take when a small employer group plan is discontinued?

When a small employer group plan is discontinued, the insurer must notify all affected employers. This is crucial because the employers have a vested interest in understanding how the discontinuation of the plan will impact their employees’ coverage. Notifying affected employers ensures transparency and provides them with the necessary information to seek alternative coverage options or make informed decisions regarding employee benefits. This requirement is typically grounded in regulatory standards that aim to protect consumers and ensure they have adequate time to transition to other plans without a gap in coverage.

The other options lack the comprehensive approach needed in such situations. For instance, informing only the regulatory agency would not adequately address the needs of the employers who rely on the coverage. Simply stopping payments would leave employers and their employees without health coverage and could lead to significant legal and financial implications. Waiting for employers to request cancellation places the onus incorrectly on them, which could result in unintentional coverage gaps and confusion. Thus, the requirement to notify all affected employers reflects a commitment to consumer protection and proactive communication.