ABSTRACT
During the early 1990s, the majority of states enacted legislation to regulate the small-group health insurance market. These measures were aimed at improving coverage among small-firm employees and their dependents by making coverage more accessible and affordable. Reforms aimed at improving access to health insurance included provisions such as guaranteed issue, guaranteed renewability, portability, and limits on pre-existing condition restrictions; premiums associated with such coverage were regulated through rules that limited premium variability across small firms. Prior to reform, it was believed that the small-group market was subject to high premiums, medical underwriting, and restrictions on the nature of coverage – features which were all designed to avoid adverse selection.
