Vote Smart's Synopsis:

Vote to pass with amendment a bill that establishes standards for association health plans and multiple employer welfare arrangements.

Highlights:

• Defines “Employer member” as a person or entity acting directly as the employer of at least 1 employee, or a working owner, either of whom is a participant covered under the Path 2 Multiple Employer Welfare Arrangement or “MEWA” (Sec. 1).

• Defines “Path 2 Multiple Employer Welfare Arrangement” as an established or maintained associations of employers classified by the United States Department of Labor as a group or association that meets the following requirements, including (Sec. 1):

• Has a constitution of bylaws that provide for the following:

• Regular meetings;

• Collection of dues from members; and

• Operation by the Board of Trustees that includes an owner, partner, officer, director, or employee of at least 1 of the employer members of the association.

• Has at least 1 substantial business purpose unrelated to offering and providing health insurance or other employee benefits; and

• Has a commonality of interest shared among the employers comprising of the Path 2 MEWA based on the following, including:

• An establishment of employers in the same trade, industry, line of business, or profession; or

• Being a statewide organization where each employer that is a member of the organization has a principal place of business.

• Defines “Sponsoring association” as an association or two or more employer members that offers an employee welfare benefit plan as a Path 2 MEWA (Sec. 1).

• Requires that all MEWAs have at least 1 employer member that is either domiciled in this state or has its principal headquarters or principal administrative office in this state or solicits an employer that is domiciled in this in this state or that has its principal headquarters or principal administrative office in this state (Sec. 1).

• Prohibits an insurer from approving a group health plan to a sponsoring association to an employer member of a sponsoring association unless all the following requirements are met, including (Sec. 1):

• The sponsoring association has been established and maintained in good faith for a period of at least 3 years;

• Has at the outset a minimum of 500 individuals eligible for coverage;

• Offers group health coverage to all individuals for a period of 1 year;

• Maintains a minimum net worth equal to at least 1 months premium, which must be held in a trust separate from the sponsorings associations operating assets; and

• Maintains at all times an adequate plan for protection against insolvency that is acceptable to the Commissioner.

• Authorizes an insurer or sponsoring association to make distinctions among its employer members based on factors other than health-status factors, such as industry, occupation, or geography (Sec. 1).

• Requires a sponsoring association only offer group health coverage plans to the following individuals, including (Sec. 1):

• Eligible employees of the employer member as defined above; and

• The spouse or dependent children of any eligible employee.

• Specifies that a group health plan offered by a sponsoring association meet the following requirements, including (Sec. 1):

• Neither being offered or advertised to the general public;

• Provides a level of coverage equal or greater to 60 percent of the actuarial value of allowed costs for covered benefits; and

• Provides coverage for hospital and physician services.

• Prohibits sponsoring associations from having conditional eligibility for coverage and requires they continue eligibility coverage for the following, including (Sec. 1):

• Health status and medical conditions including both physical and mental illness;

• Claims experience, receipt of health care;

• Medical history and genetic information; and

• Evidence of insurability or disability.

• Establishes that no limitations on coverage shall be based on pre-existing conditions (Sec. 1).

• Prohibits anything in this Act from being construed to require a sponsoring association or insurer provide particular benefits other than those provided under the terms of the plan or otherwise required by law (Sec. 1).

• Prohibits any insurer or sponsoring association from requiring individuals pay a premium or contribution that is greater than the premium or contribution for a similarly situated individual enrolled in the plan as a spouse or dependent of the individual on the basis of any health status-related factor (Sec. 1).

• Specifies that nothing in this act shall restrict the amount an insurer may charge for coverage under a group health plan offered to a sponsoring association or to prevent an insurer from establishing premium discounts (Sec. 1).

Full Bill Text

Vote Smart's Synopsis:

Vote to pass with amendment a bill that establishes standards for association health plans and multiple employer welfare arrangements.

Highlights:

• Defines “Employer member” as a person or entity acting directly as the employer of at least 1 employee, or a working owner, either of whom is a participant covered under the Path 2 Multiple Employer Welfare Arrangement or “MEWA” (Sec. 1).

• Defines “Path 2 Multiple Employer Welfare Arrangement” as an established or maintained associations of employers classified by the United States Department of Labor as a group or association that meets the following requirements, including (Sec. 1):

• Has a constitution of bylaws that provide for the following:

• Regular meetings;

• Collection of dues from members; and

• Operation by the Board of Trustees that includes an owner, partner, officer, director, or employee of at least 1 of the employer members of the association.

• Has at least 1 substantial business purpose unrelated to offering and providing health insurance or other employee benefits; and

• Has a commonality of interest shared among the employers comprising of the Path 2 MEWA based on the following, including:

• An establishment of employers in the same trade, industry, line of business, or profession; or

• Being a statewide organization where each employer that is a member of the organization has a principal place of business.

• Defines “Sponsoring association” as an association or two or more employer members that offers an employee welfare benefit plan as a Path 2 MEWA (Sec. 1).

• Requires that all MEWAs have at least 1 employer member that is either domiciled in this state or has its principal headquarters or principal administrative office in this state or solicits an employer that is domiciled in this in this state or that has its principal headquarters or principal administrative office in this state (Sec. 1).

• Prohibits an insurer from approving a group health plan to a sponsoring association to an employer member of a sponsoring association unless all the following requirements are met, including (Sec. 1):

• The sponsoring association has been established and maintained in good faith for a period of at least 3 years;

• Has at the outset a minimum of 500 individuals eligible for coverage;

• Offers group health coverage to all individuals for a period of 1 year;

• Maintains a minimum net worth equal to at least 1 months premium, which must be held in a trust separate from the sponsorings associations operating assets; and

• Maintains at all times an adequate plan for protection against insolvency that is acceptable to the Commissioner.

• Authorizes an insurer or sponsoring association to make distinctions among its employer members based on factors other than health-status factors, such as industry, occupation, or geography (Sec. 1).

• Requires a sponsoring association only offer group health coverage plans to the following individuals, including (Sec. 1):

• Eligible employees of the employer member as defined above; and

• The spouse or dependent children of any eligible employee.

• Specifies that a group health plan offered by a sponsoring association meet the following requirements, including (Sec. 1):

• Neither being offered or advertised to the general public;

• Provides a level of coverage equal or greater to 60 percent of the actuarial value of allowed costs for covered benefits; and

• Provides coverage for hospital and physician services.

• Prohibits sponsoring associations from having conditional eligibility for coverage and requires they continue eligibility coverage for the following, including (Sec. 1):

• Health status and medical conditions including both physical and mental illness;

• Claims experience, receipt of health care;

• Medical history and genetic information; and

• Evidence of insurability or disability.

• Establishes that no limitations on coverage shall be based on pre-existing conditions (Sec. 1).

• Prohibits anything in this Act from being construed to require a sponsoring association or insurer provide particular benefits other than those provided under the terms of the plan or otherwise required by law (Sec. 1).

• Prohibits any insurer or sponsoring association from requiring individuals pay a premium or contribution that is greater than the premium or contribution for a similarly situated individual enrolled in the plan as a spouse or dependent of the individual on the basis of any health status-related factor (Sec. 1).

• Specifies that nothing in this act shall restrict the amount an insurer may charge for coverage under a group health plan offered to a sponsoring association or to prevent an insurer from establishing premium discounts (Sec. 1).

Full Bill Text