Health care reform signed into law by President Barack Obama could lead to the demise of small-group insurance market in the U.S., according to the chief executive of one of the nation’s Blue Cross Blue Shield affiliates.

Blue Cross & Blue Shield of Rhode Island will pay $1.8 million in restitution and a record fine of $325,000 through an agreement with state regulators over how it “misinterpreted” the way health status should be calculated.

Highmark Inc., the state’s largest health insurer, is shifting its small-group business to a for-profit entity, which will allow it to consider medical underwriting.