(a) A small employer insurer may not, directly or indirectly, enter into a contract, agreement, or arrangement with an insurance producer, a managing general agent, or a third-party administrator that provides for or results in the compensation paid to an insurance producer for the sale of a health care insurance plan to vary based on the health status, claims experience, industry, occupation, size, or geographic location of the small employer. This subsection does not apply to a compensation arrangement that provides compensation to an insurance producer, a managing general agent, or a third-party administrator on the basis of a percentage of premium that does not vary based on the health status, claims experience, industry, occupation, size, or geographic location of the small employer.

(b) A small employer insurer shall provide reasonable compensation, as provided under the plan of operation of the program, to an insurance producer, a managing general agent, or a third-party administrator, if any, for the sale of a basic or standard health care insurance plan.

(c) A small employer insurer, an insurance producer, a managing general agent, or a third-party administrator may not induce or otherwise encourage a small employer to separate or otherwise exclude an employee from health coverage or benefits provided in connection with the employee's employment.

(d) A small employer insurer may only deny an application for coverage from a small employer in writing, and the writing must state the reasons for the denial.

(e) The director may establish by regulation additional standards to provide for the fair marketing of health care insurance plans to small employers in this state.

(f) A person who enters into a contract, agreement, or other arrangement with a small employer insurer to provide administrative, marketing, or other services related to the offering of health care insurance plans to small employers in this state is subject to this section as if it were a small employer insurer.

(g) A violation of this section by a person is an unfair trade practice for purposes of AS 21.36.