By Tulay Turan, J.D.
Iowa Governor Kim Reynolds has signed a bill that allows associations of employers or certain agricultural organizations to offer health plans that do not comply with some of the Patient Protection and Affordable Care Act’s provisions. Senate File 2349 allows employer association health plans (AHP), a type of multiple employer welfare arrangement (MEWA), to be established by bona fide associations of employers.
The law also provides that health benefit plans sponsored by a nonprofit agricultural organization domiciled in the state will not be classified as health insurance, and will not be subject to regulation by the Commissioner of the Iowa Insurance Division if requirements outlined within the law are met. The health benefit plans are to be provided through a self-funded arrangement and administered by a domestic third-party administrator that holds a certificate of registration issued by the Commissioner.
Governor Reynolds praised the Farm Bureau for its work on the legislation saying in a press release that "thousands of Iowans will now have affordable health care coverage." But America’s Health Insurance Plans (AHIP) had opposed it, stating in a letter that the bill would remove important consumer protections, increase premiums and promote an unlevel playing field.
Iowa’s move comes ahead of the Department of Labor’s issuance of a final rule on expanding the criteria for forming AHPs. The DOL issued a proposed rule in January 2018, and comments were plentiful. A coalition of 17 Attorneys General registered their opposition, viewing the rule as a move to evade the consumer protections enshrined in the ACA and sabotage the health care reform law. Proponents, however, say these plans could provide better access to health care for small businesses, the self-employed, and gig workers, who often find themselves priced out of good options.
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