SB 227-FN - AS INTRODUCED
SENATE BILL 227-FN
SPONSORS: Sen. Bradley, Dist 3
This bill makes changes to the law governing multiple-employer welfare arrangements.
This bill is a request of the insurance department.
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Explanation: Matter added to current law appears in bold italics.
Matter removed from current law appears [in brackets and struckthrough.]
Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.
STATE OF NEW HAMPSHIRE
In the Year of Our Lord Two Thousand Nineteen
Be it Enacted by the Senate and House of Representatives in General Court convened:
415-E:1 Definitions. In this chapter:
I. “Bona fide pathway II association” means a group or association that meets the requirements of 29 C.F.R. section 2510.3-5(b).
II. "Commissioner" means the insurance commissioner of the state of New Hampshire.
III. Employee welfare benefit plan” has the same meaning as in 29 U.S.C. section 1002(1).
IV. “Fully insured health benefit plan” means a policy, contract, certificate, or agreement to provide, deliver, arrange for, pay for, or reimburse any of the costs of health services, that is offered or issued to bona fide pathway II association by a health insurer licensed to do business in New Hampshire and that bears the risk under the plan.
V. "Fund balance" means the total assets in excess of total liabilities, except that assets pledged to secure debts not reflected on the books of the multiple-employer welfare arrangement shall not be included in the fund balance. Fund balance shall include other contributed capital, retained earnings, and surplus notes.
VI. "Insolvency termination" means the termination of an arrangement where the fund balance as of the termination date is inadequate.
VII. “Insurer” means any insurer, nonprofit hospital or medical service corporation, health maintenance organization, or managed care organization, including but not limited to an insurer offering health coverage as defined in RSA 420-G:2, IX.
VIII. "Multiple-employer welfare arrangement (MEWA)" or “association” means an employee welfare benefit plan or any other arrangement which is established or maintained for the purpose of offering or providing health benefits to the employees of 2 or more employers, or to their beneficiaries, and shall include a MEWA as defined in the Employee Retirement Income Security Act of 1974, 29 U.S.C. section 1001 et seq. (ERISA). This shall include plans established by any political subdivision of the state or religious organization, but shall not include any plan or arrangement established or maintained under or pursuant to one or more agreements deemed collective bargaining agreements under section 3(40)(A)(i) of (ERISA). For the purposes of this chapter, 2 or more trades or businesses, whether or not incorporated, shall be deemed a single employer if such trades or businesses are under common ownership or within the same control group as defined under section 3(40)(B) of ERISA.
415-E:1-a Bona Fide Pathway II Association Coverage; Purpose.
I. Bona fide pathway II association coverage as set forth in the United States Department of Labor’s June 21, 2018 amendment to 29 C.F.R. section 2510, 83 Fed. Reg. 28,961 (codified at 29 C.F.R., section 2510.3-5) shall be permissible in New Hampshire provided it conforms with the 2019 amendments to Title XXXVII concerning this coverage.
II. The purpose of this 2019 amendment is to protect New Hampshire consumers and promote the stability of New Hampshire’s health insurance markets, to the extent permitted under federal law, including requirements regarding licensure, solvency, reserving, and rating, and the mitigation of adverse selection against the individual and small group markets.
415-E:1-b Fully-Insured MEWA and Association Coverage.
I. No insurer shall issue a fully-insured health benefit plan to an association or MEWA with covered lives in New Hampshire, unless both the plan and the association or MEWA meet the requirements of this chapter with respect to bona fide pathway II associations. A fully-insured association or MEWA that meets all requirements of RSA 420-M shall not be subject to the financial solvency requirements of this chapter.
II. An insurer may issue a fully insured health benefit plan that conforms with the requirements of this chapter to a qualified purchasing alliance certified under RSA 420-M:13, III, as a bona fide pathway II association, subject to compliance with all applicable requirements of this chapter with respect to such associations and the coverage that may be issued to them.
415-E:1-c Benefit Requirements for Bona Fide Pathway II Association Coverage.
I. Each health benefit plan offered to or by a bona fide pathway II association, whether on a fully insured or self-funded basis, shall, at a minimum, provide the following benefits:
(a) Coverage for each of the 10 essential health benefits as defined in 42 U.S.C. section 18022(b)(1), either in conformance with the New Hampshire benchmark plan or, subject to approval of the commissioner, based on a showing of actuarial value equivalence to the New Hampshire benchmark, except that pediatric dental and vision coverage may be offered to the association in either a stand-alone dental or vision plan or as a benefit embedded in the health benefit plan;
(b) Cost sharing requirements of 42 U.S.C. section 18022(c)(1), (c)(3);
(c) Lifetime and annual limits as prescribed in 29 C.F.R. section 2590.715-2711;
(d) A level of coverage equal to or greater than that designed to provide benefits that are actuarially equivalent to 60 percent of the full actuarial value of the benefits provided under the plan; and
(e) All other benefits required to comply with applicable federal laws and regulations.
II. Every health benefit plan offered by any bona fide pathway II association offering coverage on a self-funded basis, or by any insurer offering a fully insured plan to a bona fide pathway II association shall comply with and be subject to the following:
(a) Except as otherwise specifically provided herein, all requirements of RSA 420-G, including claims data and other reporting requirements;
(b) Requirements contained in RSA 420-J, and any rules adopted thereunder by the commissioner, including but not limited to network adequacy, balance billing protections, and appeal and grievance processes;
(c) Payment of premium tax as provided in RSA 400-A:31-35 and administrative assessment under RSA 400-A:39;
(d) Requirements pertaining to examinations under RSA 400-A:37;
(e) Requirements pertaining to unfair insurance trade practices under RSA 417;
(f) Vaccine association assessment under RSA 126-Q; and
(g) Individual market assessment under RSA 404-G.
III. No health benefit plan or related policy, contract, certificate, or agreement offered or issued in this state shall reserve discretion to the insurer to interpret the terms of the contract or to provide standards of interpretation or review that are inconsistent with the laws of this state. Any such policy, contract, certificate, or agreement shall be null and void to the extent it conflicts with this section.
IV. A bona fide pathway II association shall not offer, and an insurer shall not deliver or issue for delivery to a bona fide pathway II association, a health benefit plan covering lives located in this state that contains an exclusion or limitation for pre-existing conditions or a waiting period on the coverage of pre-existing conditions.
415-E:1-d Rating Requirements for Bona Fide Pathway II Association Coverage.
I. Any bona fide pathway II association, or any insurer contracting with a bona fide pathway II association to provide a health benefit plan, shall comply with all requirements of RSA 420-G, except that, for a bona fide pathway II association with 250 or more New Hampshire covered lives, small group rating standards under RSA 420-G shall not apply, regardless of the size of the member employer groups, and the association as a whole may be rated as a single risk pool.
II. Coverage for a bona fide pathway II association with 250 or more New Hampshire covered lives may be rated as a single large group in accordance with all standards applicable to large employer groups under RSA 420-G. The following additional requirements shall apply to such coverage:
(a) All premium rates charged shall be guaranteed for a rating period of at least 12 months, and shall not be changed for any reason, including, but not limited to, a change in the group's case characteristics.
(b) The association may vary rates among member small employers as follows:
(1) Variation associated with age shall not exceed 5:1.
(2) Variation associated with tobacco use shall not exceed 1.5 to 1.
(3) No other variation shall be permitted.
(c) The same rating methodology shall apply to newly covered member employer groups and employee members renewing at each annual renewal date or anniversary date. The rating methodology shall not be construed to include health carrier incentives to individual subscribers or members to participate in wellness and fitness programs provided such incentives are approved by the insurance department.
415-E:1-e Nondiscrimination Requirements for Bona Fide Pathway II Association Coverage. Bona fide pathway II association coverage shall comply with the following:
I. The group or association shall not condition employer membership in the group or association on any health factor of any individual who is or may become eligible to participate in the group health plan sponsored by the group or association.
II. The group health plan sponsored by the group or association shall comply with 29 C.F.R. section 2590.702(b) with respect to nondiscrimination in rules for eligibility of benefits.
III. The group health plan sponsored by the group or association shall comply with 29 C.F.R. section 2590.702(c) with respect to nondiscrimination in premiums or contributions required by any participant or beneficiary for coverage under the plan.
IV. In applying the nondiscrimination provisions of paragraphs II and III, the group or association shall not treat the employees of different employer members of the group or association as distinct groups of similarly-situated individuals based on a health factor of one or more individuals.
415-E:1-f Movement from Bona Fide Pathway II Association Coverage to Small Group Coverage. A small employer that leaves the small group market for bona fide pathway II association coverage shall not be permitted to return to small group coverage for a period of 24 months following the departure from such coverage, nor shall an insurer be required to issue small group coverage to such a group.
I. No person shall[, after April 1, 1992,] operate a multiple-employer welfare arrangement unless such arrangement is approved by the commissioner. [No person shall, after April 1, 1992, operate a multiple-employer welfare arrangement in existence prior to April 1, 1992, unless such arrangement has submitted for approval in compliance with RSA 415-E:4, or otherwise meets the special requirements of paragraph III of this section.] A foreign or domestic MEWA or association shall be subject to the jurisdiction of this state if it provides a health benefit plan that covers the employees of at least one employer that maintains a work location in New Hampshire, which is the primary workplace of at least one New Hampshire resident, including any self-employed New Hampshire resident who is qualified to enroll in the plan.
II. This chapter shall not apply to a multiple-employer welfare arrangement which offers or provides benefits [which are fully insured by an authorized insurer or] under the provisions of RSA 5-B.
III. RSA 415-E:4, RSA 415-E:8, RSA 415-E:9, III, and RSA 415-E:11 shall not apply to a multiple-employer welfare arrangement which:
(a) Meets the general eligibility requirements of RSA 415-E:3, I[;].
(b) Is administered primarily from a principal place of business located within the state of New Hampshire[;].
(c) Has provided employee health benefits for a continuous period of 10 or more years[;].
[(d) Maintains a termination liability fund wherein the fund balance plus the total liabilities of the multiple-employer welfare arrangement shall at no time, for a consecutive 90-day period, be less than 40 percent of the aggregate amount of premiums billed during the 6 prior months. For purposes of this subparagraph, that surety amount, if any, deposited with the commissioner pursuant to RSA 415-E:7, I, may be credited as a fund balance asset toward the termination liability fund amount required under this chapter; and
(e) Files with the commissioner, not later than 4 months following the end of each fiscal year, a report on the financial status of the termination liability fund, which report is filed under oath by a member of its board of trustees, or by an administrative executive duly appointed by the board, and further certified to by an independent certified public accountant with a place of business located within the state of New Hampshire.
IV. In the event a multiple-employer welfare arrangement does not satisfy the requirements of paragraph III, the arrangement shall within 60 days file with the commissioner an application for approval under RSA 415-E:4, and shall be subject to all provisions of this chapter until such time as the requirements of paragraph III are satisfied.]
415-E:3 General Eligibility.
I. Except as provided in paragraph I-a, to meet the requirements for approval and to maintain a multiple-employer welfare arrangement, an arrangement shall be:
(b) Established by a trade association, industry association, political subdivision of the state, religious organization, or professional association of employers or professionals which has a constitution or bylaws and which has been organized and maintained in good faith for a continuous period of one year for purposes other than that of obtaining or providing insurance.
(c) Operated pursuant to a trust agreement by a board of trustees which shall have complete fiscal control over the arrangement and which shall be responsible for all operations of the arrangement. The trustees selected shall be owners, partners, officers, directors, or employees of one or more employers in the arrangement. A trustee may not be an owner, officer, or employee of the administrator or service company of the arrangement. The trustees shall have the authority to approve applications of association members for participation in the arrangement and to contract with an authorized administrator or service company to administer the day-to-day affairs of the arrangement.
(d) Neither offered nor advertised to the public generally.
(e) Operated in accordance with sound actuarial principles.
I-a. For a bona fide pathway II association, an arrangement shall not be required to meet the requirements under subparagraph I(a) or (b) if it conforms with the following:
(a) The group or association has a formal organizational structure with a governing body, bylaws, and other similar indications of formality, and complies with subparagraph I(c) and with all other organizational requirements under this chapter and under RSA 420-M if the association offers fully insured coverage.
(b) The functions and activities of the group or association are controlled by its employer members, and the group’s or association’s employer members that participate in the group health plan control the plan, both in form and in substance.
(c) The employer members have a commonality of interest, such that one or both of the following standards are met, in a manner that is not a subterfuge for discrimination as prohibited under RSA 415-E:1-e:
(1) The employers are in the same trade, industry, line of business or profession; or
(2) Each employer has a principal place of business in the same region.
(d) The group or association operating the arrangement has at least one substantial business purpose unrelated to offering and providing health coverage or other employee benefits to its employer members and their employees.
(e) Each employer member of the group or association participating in the group health plan is a person acting directly as an employer of at least one employee who is a participant covered under the plan.
(f) The group or association does not make health coverage through the group’s or association’s group health plan available other than to:
(1) An employee of a current employer member of the group or association; and
(2) A beneficiary of an individual eligible under (f)(1).
(g) The group or association is not a health insurance issuer, or owned or controlled by a health insurance issuer, or by a subsidiary or affiliate of a health insurance issuer, other than to the extent such entities participate in the group or association in their capacity as employer members of the group or association.
II. If the plan is being offered on a self-funded basis, the arrangement shall issue to each covered employee a policy contract, certificate, summary plan description, or other evidence of the benefits and coverages provided. This evidence of the benefits and coverages provided shall contain in boldfaced print in a conspicuous location, the following statement: "The benefits and coverages described herein are provided through a trust fund established and funded by a group of employers." [Arrangements in existence prior to January 1, 1992, that have previously issued benefit descriptions to employees may meet the disclosure requirements under this chapter by issuing to each employee such additional written material necessary to meet the requirements of this paragraph.]
II-a. Each arrangement shall provide to each covered employee, on request, a written statement of the dollar amount of allowable benefit for any procedure which is requested by the appropriate procedure code.
[II-b. No arrangement shall extend preexisting condition exclusions beyond a period of 9 consecutive months after the date of enrollment of the person's health coverage.]
III. Each self-funded arrangement shall maintain specific excess insurance with a retention level determined in accordance with sound actuarial principles and approved by the commissioner.
IV. Each self-funded arrangement shall establish and maintain appropriate loss reserves determined in accordance with sound actuarial principles and approved by the commissioner.
V. The commissioner shall not grant or continue approval until such time as the arrangement replaces any trustee found by the commissioner, upon the presentation of sufficient evidence:
(a) To be incompetent;
(b) To be guilty of, or to have pled guilty or no contest to a felony, or a crime involving moral turpitude;
(c) To have had any type of insurance license revoked in this or any other state;
(d) To have improperly manipulated assets, accounts, or specific excess insurance or to have otherwise acted in bad faith.
VI. To qualify for and retain approval to transact business, an arrangement shall make all contracts with administrators or service companies available for inspection by the department initially, and thereafter upon reasonable notice.
VII. Failure to maintain compliance with applicable eligibility or filing requirements established by this section shall be grounds for suspension or revocation of approval of an arrangement, provided, however, that such arrangement shall have 60 days after notification by the commissioner to take such action necessary to correct the deficiency.
415-E:5 Termination Liability Fund.
I. Each self-funded multiple-employer welfare arrangement shall maintain a termination liability fund wherein the fund balance of the multiple-employer welfare arrangement shall at no time, for a consecutive 90-day period, be less than 40 percent of the aggregate amount of premiums billed during the 6 prior months. For purposes of this paragraph, that surety amount, if any, deposited with the commissioner pursuant to RSA 415-E:7, I, may be credited as a fund balance asset toward the termination liability fund amount required under this chapter.
II. Each self-funded multiple-employer welfare arrangement shall file with the commissioner, not later than 4 months following the end of each fiscal year, a report on the financial status of the termination liability fund, which report is filed under oath by a member of its board of trustees, or by an administrative executive duly appointed by the board, and further certified to by an independent certified public accountant with a place of business located within the state of New Hampshire
I. The commissioner may, upon reasonable notice, conduct an examination of the loss reserves, financial condition, specific excess insurance, and working capital of a multiple-employer welfare arrangement the costs of which shall be borne by the arrangement. If the commissioner preliminarily finds that the reserves, specific excess insurance, or financial condition may be inadequate, or that the arrangement does not have a combined working capital in an amount establishing the financial strength and liquidity of the arrangement to pay claims promptly and showing evidence of the financial ability of the arrangement to meet its obligations to covered employees, the commissioner shall notify the arrangement of such inadequacy. Upon being so notified, the arrangement shall within 30 days file with the commissioner all information which, in the belief of the arrangement, proves the reasonableness and adequacy of the condition noted as being inadequate.
I. To assure the faithful performance of its obligations to its member employers and covered employees and their dependents, every arrangement shall, within 30 days after the close of the arrangement's fiscal year, deposit with the commissioner cash, securities, or any combination of these or other measures acceptable to the commissioner, in an amount equal to $500,000 or 25 percent of the preceding 12 months' health care claims expenditures [or 5 percent of gross annual premiums for the succeeding year], whichever is greater[; however, in no case shall the amount of the deposit exceed $100,000]. All income from deposits shall belong to the depositing arrangement and shall be paid to it as it becomes available. An arrangement that has made a securities deposit may withdraw that deposit, or any part of such deposit, after making a substitute deposit of cash, securities, or any combination of these or other measures of equal amount and value, upon approval by the commissioner. No judgment creditor or other claimant of a multiple-employer welfare association shall have the right to levy upon any of the assets or securities held in this state as a deposit under this section.
415-E:12 [Place of Business;] Maintenance of Records. Each arrangement shall [have and maintain its principal place of business in this state and shall] make available to the commissioner complete records of its assets, transactions, and affairs in accordance with such methods and systems as are customary for, or suitable to, the kind or kinds of business transacted.
415-E:15 Rehabilitation, Dissolution. Any rehabilitation, liquidation, conservation, supervision, or dissolution of a multiple-employer welfare arrangement shall be conducted under the supervision of the commissioner, who shall have all power with respect thereto granted to it under the laws governing the rehabilitation, liquidation, conservation, supervision, or dissolution of insurers.
415-E:16 Rulemaking. The commissioner may adopt such rules, pursuant to RSA 541-A, as [he deems] are reasonable and necessary in order to carry out properly the functions and responsibilities assigned the insurance department under [the laws of the state. This rulemaking authority shall expire on January 1, 1993, at which time this section, unless replaced by a later legislative enactment, shall be deemed repealed. Any rules adopted under this section shall be drafted in as narrow a manner as possible, consistent with the authority granted the department under the laws of this state] this chapter.
XVI.(a) "Small employer" means a business or organization which employed on average, one and up to 50 employees, including owners and self-employed persons, on business days during the previous calendar year. A small employer is subject to this chapter whether or not it becomes part of an association, multi-employer plan, trust, or any other entity cited in RSA 420-G:3 provided it meets this definition; provided that coverage written to a bona fide pathway II association with at least 250 New Hampshire covered lives that meets all applicable standards under RSA 415-E and all large group standards under this chapter shall not be considered small employer coverage.
III. Health carriers shall actively market, issue, and renew all of the health coverages they sell in the small employer market to all small employers except that a health carrier shall not be required to issue small employer coverage to a group that previously was covered as part of a bona fide pathway II association under RSA 415-E for a period of 24 months after the date that the group initiated pathway II coverage.
X. "Qualified purchasing alliance" means a purchasing alliance that has obtained certification from the commissioner under RSA 420-M:13 as a qualified purchasing alliance with authority to operate in the same manner as a [qualified association trust pursuant to RSA 420-G:10] bona fide pathway II association under RSA 415-E.
A purchasing alliance that has a minimum of [3,000] 250 enrollees may elect to obtain certification from the commissioner as a qualified purchasing alliance. To obtain certification, a purchasing alliance shall demonstrate:
(b) Health promotion and disease prevention; or
III. That the purchasing alliance meets all requirements under RSA 415-E to operate as a bona fide pathway II association.
420-G:10 Qualified Association Trust [and Qualified Purchasing Alliance].
I. A qualified association trust or other entity, as defined in RSA 420-G:2, XV[, and a qualified purchasing alliance, as defined in RSA 420-M:2, X,] shall:
(a) Comply with the rating restrictions outlined in RSA 420-G:4 for all small employer members with 50 or fewer employees based upon the association's or alliance's group experience, except that [for a qualified association trust,] no rating factor shall be utilized without the express written consent of the association.
(b) Offer all eligible members, as defined under the applicable trust or other documents, coverage and rates on a guaranteed issue and renewable basis.
(c) Comply with the regulations concerning medical underwriting in RSA 420-G:5.
(d) Comply with the preexisting conditions provision of RSA 420-G:7.
(e) Prohibit any employer that voluntarily discontinues participation in either a qualified association trust or a qualified purchasing alliance from rejoining for a period of at least 24 months.
II. Nothing in this chapter shall be interpreted to limit the size of employers who may participate in coverage with a qualified association trust [or a qualified purchasing alliance].
SB 227-FN- FISCAL NOTE
FISCAL IMPACT: [ X ] State [ X ] County [ X ] Local [ ] None
Estimated Increase / (Decrease)
[ X ] General [ ] Education [ X ] Highway [ X ] Other - Various Government Funds
This bill makes changes to the law governing multiple employer welfare arrangements.
The Insurance Department indicates this bill establishes parameters for association health plans pursuant to recent federal regulations. The Department assumes the intent of such efforts is to provide more insurance purchasing alternatives for employers and self-employed individuals. To the extent rules for Associations differ from the rest of the marketplace, there could be anti selection, where lower risk customers leave current plans for lower cost insurance.
This may impact how other markets price their products. The Department assumes the new plans would be subject to the insurance premium tax. The Department indicates the bill would not impact its operating budget.
|Jan. 3, 2019||Introduced 01/03/2019 and Referred to Commerce; SC 8|
|Feb. 19, 2019||Hearing: 02/19/2019, Room 100, SH, 01:45 pm; SC 11|
|March 12, 2019||Committee Report: Rereferred to Committee, 03/12/2019; SC 13|
|March 14, 2019||Committee Report: Rereferred to Committee, 03/14/2019; SC 13|
|March 14, 2019||Rereferred to Committee, RC 14Y-10N, MA; 03/14/2019; SJ 8|
|Feb. 19, 2019||Senate||Hearing|