(a) A small employer health benefit plan issuer may not establish a separate class of business based on:
(1) participation requirements; or
(2) whether the coverage provided to a small employer group is provided on a guaranteed issue basis or is subject to underwriting or proof of insurability.
(b) A small employer health benefit plan issuer may not directly or indirectly use as a criterion for establishing a separate class of business:
(1) the number of employees and dependents of a small employer; or
(2) except as provided by Section 1501.202(b)(3), the trade or occupation of the employees of a small employer or the industry or type of business of the small employer.