S.F. 2412 Section 1. NEW SECTION . 505.18A State innovation waiver. 1 1. The commissioner may develop by rule a state innovation 2 waiver pursuant to section 1332 of the federal Patient 3 Protection and Affordable Care Act, Pub. L. No. 111-148. 4 2. The commissioner may submit an application on behalf of 5 the state to the United States secretary of health and human 6 services and the United States secretary of the treasury for 7 the state innovation waiver developed pursuant to subsection 1. 8 3. If a state innovation waiver submitted pursuant to 9 subsection 2 is approved by the United States Secretary of 10 health and human services and the United States secretary 11 of the treasury, the commissioner may implement the state 12 innovation waiver in a manner consistent with applicable state 13 and federal law. 14 4. The commissioner may adopt emergency rules under section 15 17A.4, subsection 3, and section 17A.5, subsection 2, paragraph 16 “b” , to implement the provisions of this section and the rules 17 shall be effective immediately upon filing unless a later date 18 is specified in the rules. Any rules adopted in accordance 19 with this section shall also be published as a notice of 20 intended action as provided in section 17A.4. 21 Sec. 2. Section 507A.4, subsection 9, Code 2020, is amended 22 by striking the subsection and inserting in lieu thereof the 23 following: 24 9. Transactions involving a multiple employer welfare 25 arrangement as defined in section 3 of the federal Employee 26 Retirement Income Security Act of 1974, 29 U.S.C. §1002, 27 paragraph 40, or a multiple employer welfare arrangement formed 28 as an association health plan pursuant to 29 C.F.R. pt. 2510, 29 that meets the requirements of chapter 513D. 30 Sec. 3. Section 509.1, subsection 9, Code 2020, is amended 31 to read as follows: 32 9. A policy of group health insurance coverage issued to an 33 associated health plan a multiple employer welfare arrangement 34 pursuant to section 513D.1 chapter 513D that is subject to 35 -1- LSB 5415SZ (1) 88 ko/rn 1/ 6

S.F. 2412 regulation by the commissioner. 1 Sec. 4. Section 509.19, subsection 2, paragraph d, Code 2 2020, is amended to read as follows: 3 d. A multiple employer welfare arrangement , as defined 4 in section 3 of the federal Employee Retirement Income 5 Security Act of 1974, 29 U.S.C. §1002 (40) , paragraph 40 , or a 6 multiple employer welfare arrangement formed as an association 7 health plan pursuant to 29 C.F.R. pt. 2510, that meets the 8 requirements of section 507A.4, subsection 9 , paragraph “a” 9 chapter 513D . 10 Sec. 5. Section 513D.1, Code 2020, is amended by striking 11 the section and inserting in lieu thereof the following: 12 513D.1 Multiple employer welfare arrangements and association 13 health plans. 14 1. As used in this chapter, unless the context otherwise 15 requires: 16 a. “AHP” means a multiple employer welfare arrangement 17 formed as an association health plan pursuant to 29 C.F.R. pt. 18 2510. 19 b. “Commissioner” means the commissioner of insurance. 20 c. “MEWA” means a multiple employer welfare arrangement as 21 defined in section 3 of the federal Employee Retirement Income 22 Security Act of 1974, 29 U.S.C. §1002, paragraph 40. 23 2. An AHP or MEWA that offers a plan to or maintains a group 24 health plan for any resident of this state shall be subject to 25 the jurisdiction of the commissioner and shall comply with all 26 of the following requirements: 27 a. The AHP or MEWA must be administered by an insurer 28 authorized to do the business of insurance in this state or 29 an authorized third-party administrator that holds a current 30 certificate of registration pursuant to section 510.21. 31 b. The AHP or MEWA must be established by a trade, 32 industry, or professional association of employers that has a 33 constitution or bylaws, is organized and maintained in good 34 faith, and has membership stability as defined by rules adopted 35 -2- LSB 5415SZ (1) 88 ko/rn 2/ 6

S.F. 2412 by the commissioner. 1 c. The AHP or MEWA must register with the commissioner and 2 obtain and maintain a certificate of registration issued by the 3 commissioner. 4 d. The AHP or MEWA shall comply with all rules and solvency 5 standards established by rules adopted by the commissioner. 6 3. An AHP or MEWA that does not meet the solvency standards 7 pursuant to subsection 2, paragraph “d” , shall be subject to 8 chapter 507C. 9 4. An AHP or MEWA that meets all of the requirements of 10 subsection 2 shall not be considered any of the following: 11 a. An insurance company or association of whatever kind or 12 character pursuant to section 432.1. 13 b. A member of the Iowa individual health benefit 14 reinsurance association pursuant to section 513C.10, subsection 15 1. 16 c. A member insurer of the Iowa life and health insurance 17 guaranty association pursuant to section 508C.5. 18 5. An AHP or MEWA that is registered with the commissioner 19 pursuant to subsection 2, paragraph “c” , shall annually file 20 with the commissioner on or before March 1 a copy of the report 21 required to be filed by the AHP or MEWA with the United States 22 department of labor pursuant to 29 C.F.R. §2520.101-2. 23 6. An AHP or MEWA that is registered with the commissioner 24 pursuant to subsection 2, paragraph “c” , shall annually file 25 with the commissioner a report on or before March 1 for the 26 preceding calendar year. The annual report shall contain the 27 information and be in a form and manner as prescribed by the 28 commissioner. 29 7. A foreign or domestic AHP or MEWA doing business in the 30 state shall pay fees as prescribed by the commissioner unless 31 otherwise provided by law. 32 8. A MEWA that is recognized as tax-exempt under Internal 33 Revenue Code section 501(c)(9) and that is registered with the 34 commissioner prior to January 1, 2018, shall not be considered 35 -3- LSB 5415SZ (1) 88 ko/rn 3/ 6

S.F. 2412 an AHP unless the MEWA affirmatively elects to be treated as 1 an AHP. 2 Sec. 6. Section 513D.2, subsection 1, Code 2020, is amended 3 to read as follows: 4 1. The commissioner of insurance shall adopt rules , as 5 necessary , pursuant to chapter 17A to administer this chapter . 6 EXPLANATION 7 The inclusion of this explanation does not constitute agreement with 8 the explanation’s substance by the members of the general assembly. 9 This bill relates to health insurance and the insurance 10 division of the department of commerce. 11 The bill authorizes the commissioner of insurance to develop 12 by rule a state innovation waiver (waiver) pursuant to section 13 1332 of the federal Patient Protection and Affordable Care Act, 14 Pub. L. No. 111-148, and to submit an application on behalf 15 of the state to the United States secretary of health and 16 human services and the United States secretary of the treasury 17 (secretaries) for the waiver. If a waiver is approved by the 18 secretaries, the commissioner is authorized to implement the 19 waiver in a manner consistent with applicable state and federal 20 law. The bill authorizes the commissioner to adopt emergency 21 rules to implement the waiver and the rules are to be effective 22 immediately upon filing unless a later date is specified in the 23 rules. Any rules that are adopted must also be published as a 24 notice of intended action as provided in Code section 17A.4. 25 The bill amends Code section 507A.4 and provides that Code 26 chapter 507A (unauthorized insurers) does not apply to a 27 multiple employer welfare arrangement (MEWA) or a MEWA formed 28 as an association health plan (AHP) that meets the requirements 29 of Code chapter 513D. The bill strikes current Code section 30 513D.1 (association health plans) and replaces it with new 31 provisions which detail the requirements for MEWAs and AHPs 32 that offer a plan to or that maintain a group health plan for 33 any resident of Iowa. An “AHP” is defined in the bill as a MEWA 34 formed as an association health plan pursuant to 29 C.F.R. pt. 35 -4- LSB 5415SZ (1) 88 ko/rn 4/ 6

S.F. 2412 2510. A “MEWA” is defined in the bill as a multiple employer 1 welfare arrangement as defined in section 3 of the federal 2 Employee Retirement Income Security Act of 1974, 29 U.S.C. 3 §1002, paragraph 40. 4 The bill requires an AHP or MEWA to be administered by either 5 an insurer authorized to do the business of insurance in this 6 state, or by an authorized third-party administrator that holds 7 a current certificate of registration. The AHP or MEWA must be 8 established by a trade, industry, or professional association 9 of employers that has a constitution or bylaws, is organized 10 and maintained in good faith, and has membership stability as 11 defined by rules adopted by the commissioner. The AHP or MEWA 12 must register with the commissioner and obtain and maintain a 13 certificate of registration issued by the commissioner. The 14 bill requires that an AHP or MEWA must comply with all rules 15 and solvency standards established by rules adopted by the 16 commissioner, and failure to do so subjects the AHP or MEWA 17 to Code chapter 507C (insurers supervision, rehabilitation, 18 and liquidation). An AHP or MEWA that meets all of the 19 requirements is not considered an insurance company or 20 association of whatever kind or character under Code section 21 432.1 (tax on gross premiums —— exclusions), a member of the 22 Iowa individual health benefit reinsurance association, or a 23 member insurer of the Iowa life and health insurance guaranty 24 association. 25 The bill requires AHPs and MEWAs that are registered with 26 the commissioner to annually file with the commissioner on or 27 before March 1 a copy of the report required to be filed by 28 the AHP or MEWA with the United States department of labor 29 pursuant to 29 C.F.R. §2520.101-2. The AHP and MEWA must also 30 file an annual report with the commissioner on or before March 31 1 that covers the preceding calendar year. The annual report 32 must contain the information and be in a form and manner as 33 prescribed by the commissioner. 34 A foreign or domestic AHP or MEWA doing business in the 35 -5- LSB 5415SZ (1) 88 ko/rn 5/ 6

S.F. 2412 state is required by the bill to pay fees as prescribed by the 1 commissioner unless otherwise provided by law. 2 The bill provides that a MEWA that is recognized as 3 tax-exempt under Internal Revenue Code section 501(c)(9), and 4 that is registered with the commissioner prior to January 5 1, 2018, shall not be considered an AHP unless the MEWA 6 affirmatively elects to be treated as an AHP. 7 The bill makes conforming changes to Code sections 509.1(9) 8 and 509.19(2). 9 -6- LSB 5415SZ (1) 88 ko/rn 6/ 6