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2019 SESSION

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SB 1689 Group health benefit plans; bona fide associations, benefits consortium.

Introduced by: Siobhan S. Dunnavant | all patrons    ...    notes | add to my profiles | history

SUMMARY AS PASSED:

Group health benefit plans; bona fide associations; benefits consortium. Provides that certain trusts constitute a benefits consortium and are authorized to sell health benefits plans to members of a sponsoring association that is a nonstock corporation, has five or more members participating in one or more benefits plans, has been formed for purposes other than obtaining or providing health benefits, and operates as a nonprofit entity under § 501(c)(6) of the federal Internal Revenue Code. The bill provides that a person may be a member of sponsoring association without having any employees if the person is a sole proprietorship, a corporation with a single shareholder, or a limited liability company with a single member. 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 (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. The measure removes the requirements that an association to which a group accident and sickness insurance policy is issued has at the outset a minimum of 100 persons, has been organized and maintained in good faith for purposes other than that of obtaining insurance, and has been in active existence for at least five years. The measure also replaces references to "bona fide association," as used in provisions applicable to health care plans in the small employer market, with the term "sponsoring association."

SUMMARY AS PASSED SENATE:

Group health benefit plans; bona fide associations; benefits consortium. Provides that certain trusts constitute a benefits consortium and are authorized to sell health benefits plans to members of a sponsoring association that is a nonstock corporation, has five or more members participating in one or more benefits plans, has been formed for purposes other than obtaining or providing health benefits, and operates as a nonprofit entity under § 501(c)(6) of the federal Internal Revenue Code. 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 (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. The measure removes the requirements that an association to which a group accident and sickness insurance policy is issued have at the outset a minimum of 100 persons, have been organized and maintained in good faith for purposes other than that of obtaining insurance, and have been in active existence for at least five years. The measure also replaces references to "bona fide association," as used in provisions applicable to health care plans in the small employer market, with the term "sponsoring association."

SUMMARY AS INTRODUCED:

Group health benefit plans; bona fide associations; benefits consortium. Authorizes an association organized as a nonstock corporation whose members are employers conducting business in the Commonwealth to sponsor a trust. The measure authorizes the trust, called a benefits consortium, to sell benefits plans to its members. The benefits plans may provide medical prescription drug, dental, and vision coverage for the employees of members and the sponsoring association and their dependents. The benefits may be self-funded or purchased from an insurer. The benefits consortium will be a multiple employer welfare arrangement subject to the provisions of the federal Employee Retirement Income Security Act of 1974. The measure exempts the benefits consortium from state taxation and insurance regulations. The measure also replaces references to "bona fide association," as used in provisions applicable to health care plans in the small employer market, with the term "sponsoring association."