KRS 304.17-390: Franchise plan health insurance -- Franchise plan disability insurance.

(1) Health insurance on a franchise plan is that issued to:

(a) Five (5) or more employees of a common employer; or

(b) Ten (10) or more members of any bona fide association or labor union, which

association or union was formed and exists for purposes othe r than that of

obtaining insurance, and under which such employees or members, with or

without their dependents, are issued individual policies which may vary as to

amounts and kinds of coverage as applied for, under an arrangement whereby

the premiums on the policies are to be paid to the insurer periodically by the

employer, with or without payroll deductions, or by the association, or by

some designated employee or officer of the association acting on behalf of the

employer or association members.

(2) Disability insurance on a franchise plan is that issued for:

(a) Three (3) or more employees of a common employer; or

(b) Ten (10) or more members of any bona fide association or labor union, which

association or union was formed and exists for purposes othe r than that of

obtaining insurance, and under which the employees or members, with or

without their dependents, are issued individual policies which may vary as to

amounts and kinds of coverage as applied for, under an arrangement whereby

the premiums on t he policies are to be paid to the insurer periodically by the

employer, with or without payroll deductions, or by the association, or by

some designated employee or officer of the association acting on behalf of the

employer or association members.

(3) The term "employees" includes also the employer's officers, and the employer or

partners if the employer is an individual or a partnership.

(4) An insurer may charge different rates, provide different benefits, or employ

different underwriting procedure for i ndividuals insured under a franchise plan, if

such rates, benefits, or procedures as used do not unfairly discriminate as between

individuals insured under franchise plans and individuals otherwise insured under

similar policies, taking into consideration the insuring, risk and exposure factors,

and expense elements.