By: Erin M. Hussey, Esq.
In our previous blog post, The Final AHP Rules Take a Hard Hit, we discussed the court decision that vacated (1) the bona fide provisions (including the provisions about a substantial business purpose, control, and the expanded commonality of interest requirements), and (2) the working owner provisions from the Final Rule on Association Health Plans (“AHPs”). The court remanded their decision to the Department of Labor (“DOL”) to determine how this ruling would affect the rest of the Final Rule given the severability clause. The DOL has provided an initial response via Question and Answers (“Q&As”). Those DOL Q&As detail the following:
“The Department disagrees with the District Court’s ruling and is considering all available options in consultation with the Department of Justice including the possibility of appealing the District Court’s decision and the possibility of requesting that the District Court stay its decision pending an appeal. At this time, we have not reached a decision on how to proceed.”
As such, without any action from the DOL, it appears the above-noted bona-fide and working owner provisions remain inoperative. However, the House and Senate have taken matters into their own hands. On April 11th, Sen. Mike Enzi (R-WY) and Lamar Alexander (R-TN) introduced a bill in order to protect the AHP Final Rule (S. 1170). The text of the bill is not available yet but will be made available here: https://www.govtrack.us/congress/bills/116/s1170. Sen. Enzi noted the following in his statement on the legislation:
“I rise to introduce the Association Health Plans Act of 2019 . . . My bill will simply codify the Labor Department's final rule to provide certainty for current enrollees and to ensure the pathway remains available for new association health plans to form.”
The following day, on April 12th, U.S. Representative Tim Walberg (MI-07), joined by Rep. Michael C. Burgess, M.D. (TX-26) and Rep. Virginia Foxx (NC-05), introduced the Association Health Plans Act of 2019 (H.R. 2294). The text of that bill is not available yet but will be made available here: https://www.congress.gov/bill/116th-congress/house-bill/2294.
While it is unlikely these bills will get bipartisan support, this legislation will be something to keep in mind while we await the ultimate outcome of the AHP Final Rule. If you need help understanding AHP's or self-funded health plans please contact us, today!
By Adam V. Russo, Esq.
(As published in Thompson Information Services’ Employer’s Guide to Self-Insuring Health Benefits)
August 26, 2013 – Comments made by regulators over the weekend at the summer meeting of the National Association of Insurance Commissioners (NAIC) in Indianapolis made it clear that ongoing pushback by SIIA and other stakeholder groups has dampened enthusiasm for new stop-loss regulation.
As an alternative, the NAIC ERISA Working Group agreed to move forward with the preparation of a white paper discussing regulatory issues associated with small employer self-insurance and the use of stop-loss insurance. To initiate this project, the Working Group recently surveyed all 50 states to obtain preliminary data regarding perspectives on regulatory activity.
Survey results included the following:
It was reported that work will continue on this White Paper, with the goal of completion by the end of the year. Individual states could then utilize the findings on an advisory basis.
In Other ERISA Working Group News….
DOL Presentation on New Employee Benefits Security Administration Final Rule on Ex Parte Cease and Desist and Summary Seizure Orders for MEWAs. The DOL made a presentation to the Working Group and reminded them that the ACA authorizes the DOL to issue a cease and desist order ex parte (without prior notice or hearing), and the DOL may issue a summary seizure order when it appears that a MEWA is in a financially hazardous condition. The DOL talked about MEWA regulations, and there was significant discussion regarding insolvent plans and the need to identify and police these better. The DOL mentioned with regard to cease and desist orders and summary seizures that it has expanded its breadth of financial review to include the brokers as well as the fiduciaries of the plans. However, the DOL noted the distinction between unfunded health plans, which pay claims out of their operating budgets, and self-funded health plans, which pay claims from a trust or separate account. The DOL noted that it does not have a good method to locate these unfunded plans prior to an insolvency event. Members of the Working Group asked if the DOL could develop regulations to address this deficiency, but the DOL said it did not think it was feasible to write such regulations.
Sham MEWA Plan Investigations. The regulators then met afterwards in a private session to discuss sham MEWA plan investigations.