By Tulay Turan
In comments to the Department of Labor’s proposed rule on association health plans (AHP), the National Association of Insurance Commissioners (NAIC) recommends the DOL confirm the authority of states to regulate MEWAs. The NAIC, noting the "colorful and troubling history" of MEWAs, said it is important the final rule "not threaten the states’ ability to enforce existing laws or enact laws in the future that regulate insurance."
The DOL’s proposed rule, published in the Federal Register on January 5, 2018, would allow employers to join together as a single group to purchase insurance in the large group health insurance market. Employers could offer this employment-based health insurance via an AHP. ERISA generally classifies AHPs as MEWAs. Historically, a number of MEWAs have suffered from financial mismanagement or abuse, often leaving participants and providers with unpaid benefits and bills.
"The AHP Proposed Rule clearly and rightly confirms that Association Plans created under the new rules are still MEWAs and are fully regulated by the states (largely indirectly in the case of fully-insured MEWAs; directly in the case of non-fully-insured MEWAs). The provisions in ERISA that preserve state regulatory authority over the MEWA and the plans it may purchase are not modified in this proposed rule and, therefore, existing state authority is not changed," the NAIC’s letter states.
In addition to concerns about state regulation, the NAIC commented that coordination between DOL and state insurance departments is critical and cautioned against an exception from state law for certain not fully-insured MEWAs. The NAIC also suggested the DOL postpone the effective date of the rule to 2020 to give states time to review their rules and regulations and facilitate a smooth transition.
Companies: National Association of Insurance Commissioners
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