Final answer:
A Small Employer Medical plan can be non-renewable for several reasons except for an insurer increasing premium rates, as insurance companies can adjust rates based on actuarial costs. Other valid reasons for non-renewal include non-payment of premiums, insufficient number of employees, and discontinuation of the business class by the insurer.
Step-by-step explanation:
The question pertains to the renewal of Small Employer Medical plans and the conditions under which they cannot be renewed. Among the options provided, the instance when a medical plan cannot be non-renewable is excepted by the insurer increasing the premium rates. This is due to the fact that insurance companies are generally permitted to adjust premium rates based on the coverage levels and the actuarial costs associated with insuring a particular group. On the other hand, non-payment of premiums, reducing the number of employees below the minimum required, or the insurer discontinuing the entire class of business are legitimate reasons for a plan to be non-renewable.
It is important to recognize that government regulators cannot compel insurance companies to maintain low prices with high coverage indefinitely if it results in financial loss. If premiums are lower than what is actuarially fair, then typically taxpayers or other insurance buyers end up subsidizing the difference. Additionally, the Affordable Care Act includes an employer mandate, requiring all employers with more than 50 employees to offer health insurance, which helps mitigate issues like adverse selection.