Association health plans

[Guest dwalker]

Congress is considering legislation to allow trade associations to sponsor health plans and grant them exemptions from state mandated benefits.

One of two plans may be self insured, as long as one is fully insured. DOL and many state regulators "frown" on MEWAs...Any opinions?

[Guest Kathleen Meagher]

Here in California, we have "small employer" rules for health insurance and HMOs that essentially make it unworkable for associations to offer plans that cover any employers with 50 or fewer employees. I wonder if this new legislation would supersede state insurance law.

[Guest dwalker]

Kathleen, As I read the summaries of this legislation, state law pertaining to mandated benefits will be superceded by this federal legislation, if it passes the senate. It has already passed the House. Strong lobbying efforts by TPAs and associations will probably move it through with some modification.

As always, no one will know exactly how the legislation will be interpreted until the regulations are proposed. I suspect that beyond overriding state mandated benefits, several other issues such as funding, administration, fiduciary responsibility, etc. will be affected.

FYI, I am a broker specializing in small group (10 to 50 employees)in Dallas, Texas.