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2019 SESSION

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HB 1661 Benefits consortium; formation by a sponsoring association as a nonprofit agricultural organization.

Introduced by: Christopher T. Head | all patrons    ...    notes | add to my profiles | history

SUMMARY AS PASSED:

Association health benefit plans established by associations of employers; health benefit plans for members of certain agricultural organizations. Authorizes a trust, as a benefits consortium, to sell health benefits plans to members of a sponsoring association, which is a nonstock corporation that operates as a nonprofit agricultural organization and is created primarily to promote programs for the development of rural communities and the economic stability and sustainability of farmers in the Commonwealth. The bill provides that the trust is subject to the federal Employee Retirement Income Security Act of 1974 and U.S. Department of Labor regulations applicable to multiple employer welfare arrangements and to the authority of the U.S. Department of Labor to enforce such law and regulations. The bill requires the trust to operate as a nonprofit voluntary employee beneficiary association. The bill (i) prohibits a self-funded multiple employer welfare arrangement (MEWA) from issuing health benefit plans in the Commonwealth until it has obtained a license from the State Corporation Commission; (ii) provides that health benefit plans issued by a self-funded MEWA shall be subject to taxes and maintenance assessments levied upon insurance companies; (iii) provides that health benefit plans issued by a self-funded MEWA are subject to protections of and other provisions of the Virginia Life, Accident and Sickness Insurance Guaranty Association; (iv) makes domestic self-funded MEWAs subject to all financial and solvency requirements imposed by provisions of Title 38.2 on domestic insurers unless domestic self-funded MEWAs are otherwise specifically exempted; and (v) provides that health benefit plans issued by a self-funded MEWA shall be exempt from all statutory requirements relating to insurance premium rates, policy forms, and policy cancellation and nonrenewal. The bill provides that the sponsoring association shall not, by virtue of its sponsorship of the benefits consortium or any benefits plan, be subject to the insurance laws of the Commonwealth or the tax levied on insurance companies pursuant to § 58.1-2501.

SUMMARY AS PASSED HOUSE:

Association health benefit plans established by associations of employers; health benefit plans for members of certain agricultural organizations. Authorizes a trust, as a benefits consortium, to sell health benefits plans to members of a sponsoring association, which is a nonstock corporation that operates as a nonprofit agricultural organization and is created primarily to promote programs for the development of rural communities and the economic stability and sustainability of farmers in the Commonwealth. The bill provides that the trust is subject to the federal Employee Retirement Income Security Act of 1974 and U.S. Department of Labor regulations applicable to multiple employer welfare arrangements and to the authority of the U.S. Department of Labor to enforce such law and regulations. The bill requires the trust to operate as a nonprofit voluntary employee beneficiary association. The bill (i) prohibits a self-funded multiple employer welfare arrangement (MEWA) from issuing health benefit plans in the Commonwealth until it has obtained a license from the State Corporation Commission; (ii) provides that health benefit plans issued by a self-funded MEWA shall be subject to taxes and maintenance assessments levied upon insurance companies; (iii) provides that health benefit plans issued by a self-funded MEWA are subject to protections of and other provisions of the Virginia Life, Accident and Sickness Insurance Guaranty Association; (iv) makes domestic self-funded MEWAs subject to all financial and solvency requirements imposed by provisions of Title 38.2 on domestic insurers unless domestic self-funded MEWAs are otherwise specifically exempted; and (v) provides that health benefit plans issued by a self-funded MEWA shall be exempt from all statutory requirements relating to insurance premium rates, policy forms, and policy cancellation and nonrenewal. The bill provides that the sponsoring association shall not, by virtue of its sponsorship of the benefits consortium or any benefits plan, be subject to the insurance laws of the Commonwealth or the tax levied on insurance companies pursuant to § 58.1-2501.

SUMMARY AS INTRODUCED:

Association health benefit plans established by associations of employers; health benefit plans for members of certain agricultural organizations. Directs the State Corporation Commission to adopt regulations that allow for the creation of association health plans that are consistent with certain regulations of the U.S. Department of Labor. The proposed regulation broadens the criteria under Title I of the federal Employee Retirement Income Security Act (ERISA) to allow employers to form an association solely for the purpose of sponsoring a group health plan for its employer members. Currently, employer groups are prohibited from forming associations for the sole purpose of providing group health coverage. The measure also provides that a health benefit plan sponsored by a nonprofit agricultural organization for its members is not insurance and is not subject to the jurisdiction of the Commissioner of Insurance if the health benefit plan meets certain requirements, including that it provides dues-paying members in all localities with membership opportunities and that it be administered by a third-party administrator. The measure includes provisions that exempt certain transactions regarding multiple employer welfare arrangements from insurer licensing requirements.