S.F. 2182 Section 1. Section 507A.4, subsection 9, Code 2018, is 1 amended to read as follows: 2 9. a. Transactions involving a multiple employer welfare 3 arrangement, as defined in section 3 of the federal Employee 4 Retirement Income Security Act of 1974, 29 U.S.C. §1002, 5 paragraph 40, if the multiple employer welfare arrangement 6 meets all of the following conditions: 7 (1) The arrangement is administered by an authorized 8 insurer or an authorized third-party administrator. 9 (2) The arrangement has been in existence and provided 10 health insurance in Iowa for at least five years prior to July 11 1, 1997. 12 (3) (2) The arrangement was is established by a trade, 13 industry, or professional association of employers that 14 has a constitution or bylaws, and has been is organized and 15 maintained in good faith for at least ten continuous years 16 prior to July 1, 1997 . 17 (4) (3) The arrangement registers with and obtains 18 and maintains a certificate of registration issued by the 19 commissioner of insurance . 20 (5) (4) The arrangement is subject to the jurisdiction 21 of the commissioner of insurance, including regulatory 22 oversight and complies with all rules and solvency standards as 23 established by rules adopted by the commissioner of insurance 24 pursuant to chapter 17A . 25 b. A multiple employer welfare arrangement registered with 26 the commissioner of insurance that does not meet the solvency 27 standards requirements established by rule adopted by the 28 commissioner of insurance is pursuant to chapter 17A shall be 29 subject to chapter 507C . 30 c. A multiple employer welfare arrangement that meets all 31 of the conditions of paragraph “a” shall not be considered any 32 of the following: 33 (1) An insurance company or association of any kind or 34 character under section 432.1 . 35 -1- LSB 5672XS (5) 87 ko/rj 1/ 9

S.F. 2182 (2) A member of the Iowa individual health benefit 1 reinsurance association under section 513C.10 . 2 (3) A member insurer of the Iowa life and health insurance 3 guaranty association under section 508C.5, subsection 12 . 4 d. A multiple employer welfare arrangement registered with 5 the commissioner of insurance shall file with the commissioner 6 of insurance on or before March 1 of each year a copy of the 7 report required to be filed by the multiple employer welfare 8 arrangement with the United States department of labor pursuant 9 to 29 C.F.R. §2520.101-2 . A newly formed multiple employer 10 welfare arrangement shall file with the commissioner a copy 11 of the report required to be filed pursuant to 29 C.F.R. 12 §2520.101-2 by a newly formed multiple employer welfare 13 arrangement with the United States department of labor thirty 14 days prior to operating in any state. The copy shall be filed 15 with the commissioner within thirty calendar days of the date 16 that the multiple employer welfare arrangement files the report 17 with the United States department of labor. 18 e. When not otherwise provided, a A foreign or domestic 19 multiple employer welfare arrangement doing business in this 20 state shall pay to the commissioner of insurance the fees 21 as required in pursuant to section 511.24 unless otherwise 22 provided by law . 23 Sec. 2. Section 507A.4, Code 2018, is amended by adding the 24 following new subsection: 25 NEW SUBSECTION . 11. An association health plan that meets 26 the requirements of section 513D.1. 27 Sec. 3. Section 509.1, Code 2018, is amended by adding the 28 following new subsection: 29 NEW SUBSECTION . 8A. A policy of group health insurance 30 coverage issued to an associated health plan pursuant 31 to section 513D.1 that is subject to regulation by the 32 commissioner. 33 Sec. 4. Section 509.1, subsection 9, unnumbered paragraph 34 1, Code 2018, is amended to read as follows: 35 -2- LSB 5672XS (5) 87 ko/rj 2/ 9

S.F. 2182 A policy issued to a resident of this state under a group 1 life, accident, or health insurance policy issued to a group 2 other than one described in subsections 1 through 8 8A , subject 3 to the following requirements: 4 Sec. 5. NEW SECTION . 513D.1 Association health plans. 5 1. A multiple employer welfare arrangement, as defined in 6 section 3 of the federal Employee Retirement Income Security 7 Act of 1974, 29 U.S.C. §1002, paragraph 40, is an association 8 health plan established by a bona fide association of employers 9 if all of the following requirements are satisfied: 10 a. The association exists for the purpose, in whole or in 11 part, of sponsoring a group health plan that it offers to its 12 employer members. 13 b. Each employer member of the association participating 14 in the group health plan is a person acting directly as an 15 employer of at least one employee who is a participant covered 16 under the plan. A working owner of a trade or business may 17 qualify as both an employer and an employee of the trade or 18 business. Absent knowledge to the contrary, the association 19 sponsoring the group health plan may reasonably rely on written 20 representations from the individual seeking to participate as 21 a working owner as a basis for concluding that all qualifying 22 conditions are satisfied. A working owner must meet all of the 23 following requirements: 24 (1) Must be an individual who has an ownership right of 25 any nature in a trade or business, whether incorporated or 26 unincorporated, including a partner or other self-employed 27 individual. 28 (2) Must be an individual who is earning wages or 29 self-employment income from the trade or business for providing 30 personal services to the trade or business. 31 (3) Must be an individual who is not eligible to participate 32 in any subsidized group health plan maintained by any other 33 employer of the individual or of the spouse of the individual. 34 (4) Must be an individual who either works at least 35 -3- LSB 5672XS (5) 87 ko/rj 3/ 9

S.F. 2182 thirty hours per week or at least one hundred twenty hours 1 per month, or has earned income from such trade or business 2 that at a minimum equals the working owner’s costs of 3 coverage of participation by the working owner and any 4 covered beneficiaries in the group health plan sponsored by 5 the association of employers in which the working owner is 6 participating. 7 c. The association has a formal organizational structure, a 8 governing body, and bylaws or a similar indication of formality 9 appropriate under state law for the legal form under which the 10 association operates. 11 d. The employer members control the association’s functions 12 and activities, including the establishment and maintenance of 13 the group health plan, either directly or through the regular 14 election of directors, officers, or similar representatives. 15 e. The employer members have a commonality-of-interest that 16 may be established by any of the following: 17 (1) The employer members are in the same trade, industry, 18 line of business, or professional association. 19 (2) The employer members have a principal place of business 20 wholly within the same state or within the boundaries of the 21 same metropolitan area even if such boundaries extend across 22 more than one state. 23 f. Health coverage offered to employer members through the 24 association is available to employees and former employees of 25 employer members, and the family members or other beneficiaries 26 of such employees and former employees. 27 g. The association is not a health insurance issuer 28 as described in section 733(b)(2) of the federal Employee 29 Retirement Income Security Act of 1974, 29 U.S.C. §1191b, or 30 owned or controlled by such a health insurance issuer. 31 h. The association health plan is administered by an 32 authorized insurer or an authorized third-party administrator. 33 i. The association complies with all regulations related 34 to association health plans as issued by the United States 35 -4- LSB 5672XS (5) 87 ko/rj 4/ 9

S.F. 2182 department of labor. 1 j. The association registers with and obtains and maintains 2 a certificate of registration issued by the commissioner. 3 k. The association complies with all rules and solvency 4 requirements as established by the commissioner. 5 l. An association health plan registered with the 6 commissioner files with the commissioner on or before March 1 7 of each year a copy of the report required to be filed by the 8 association with the United States department of labor pursuant 9 to 29 C.F.R. §2520.101-2. A newly formed association shall 10 file with the commissioner a copy of the report required to 11 be filed pursuant to 29 C.F.R. §2520.101-2 by a newly formed 12 association with the United States department of labor thirty 13 days prior to operating in any state. The copy shall be filed 14 with the commissioner within thirty calendar days of the 15 date the association files the report with the United States 16 department of labor. 17 m. A foreign or domestic association health plan doing 18 business in this state shall pay fees pursuant to section 19 511.24 unless otherwise provided by law. 20 2. A bona fide association, and any health coverage offered 21 by the bona fide association, must comply with all of the 22 following: 23 a. The association shall not condition employer membership 24 in the association based on any health factor, as defined in 25 29 C.F.R. §2590.702(a), of an employee, former employee, or 26 an employee’s or former employee’s family members or other 27 beneficiaries. 28 b. Subject to paragraph “d” , the group health plan sponsored 29 by the association shall comply with 29 C.F.R. §2590.702(b) 30 with respect to nondiscrimination in rules for eligibility for 31 benefits. 32 c. Subject to paragraph “d” , the group health plan sponsored 33 by the association shall comply with 29 C.F.R. §2590.702(c) 34 with respect to nondiscrimination in premiums or contributions 35 -5- LSB 5672XS (5) 87 ko/rj 5/ 9

S.F. 2182 required by any participant or beneficiary for coverage under 1 the group health plan. 2 d. In applying the nondiscrimination provisions of 3 paragraphs “b” and “c” , the association shall not treat 4 different employer members of the association as distinct 5 groups of similarly situated individuals. 6 3. The association health plan must comply with all 7 applicable regulations issued by the United States department 8 of labor pursuant to the federal Employee Retirement Income 9 Security Act of 1974 related to association health plans. 10 4. The commissioner may enter into an agreement with an 11 insurance regulator from a contiguous state if an association 12 health plan has employer members in this state and the 13 contiguous state to obtain and share information, in compliance 14 with all applicable privacy laws, relating to the association 15 health plan as necessary to enforce compliance with this 16 section. 17 5. An association health plan that meets all the 18 requirements of this section shall not be considered any of the 19 following: 20 a. An insurance company or association of any kind or 21 character under section 432.1. 22 b. A member of the Iowa individual health benefit 23 reinsurance association under section 513C.10. 24 c. A member insurer of the Iowa life and health insurance 25 guaranty association under section 508C.5. 26 Sec. 6. NEW SECTION . 513D.2 Rules and enforcement. 27 1. The commissioner shall adopt rules, as necessary, 28 pursuant to chapter 17A to administer this chapter. 29 2. The commissioner may take any enforcement action under 30 the commissioner’s authority to enforce compliance with this 31 chapter. 32 Sec. 7. EMERGENCY RULES. The commissioner may adopt 33 emergency rules under section 17A.4, subsection 3, and 34 section 17A.5, subsection 2, paragraph “b”, to administer 35 -6- LSB 5672XS (5) 87 ko/rj 6/ 9

S.F. 2182 the provisions of this Act and the rules shall be effective 1 immediately upon filing unless a later date is specified in the 2 rules. Any rules adopted in accordance with this section shall 3 also be published as a notice of intended action as provided 4 in section 17A.4. 5 Sec. 8. CONTINGENT EFFECTIVE DATE. This Act takes effect 6 upon the effective date of a United States department of 7 labor’s regulation amending 29 C.F.R. pt. 2510 in such a manner 8 as to allow the creation of association health plans consistent 9 with the provisions of this Act. 10 EXPLANATION 11 The inclusion of this explanation does not constitute agreement with 12 the explanation’s substance by the members of the general assembly. 13 This bill relates to association health plans, a type of 14 multiple employer welfare arrangement, established by bona fide 15 associations of employers. 16 The United States department of labor issued proposed 17 rules in 83 Fed. Reg. 617 (January 5, 2018) that broaden the 18 criteria under Title I of the federal Employee Retirement 19 Income Security Act (ERISA) to allow more employers to form 20 an association health plan to offer a group health plan 21 to employees, former employees, family members, and other 22 beneficiaries of the employer members of the association. 23 Currently, employer groups are prohibited from forming 24 associations for the sole purpose of providing group health 25 coverage. Under the proposed federal regulations, an 26 association may exist solely for the purpose of sponsoring 27 a group health plan for its employer members. The current 28 commonality-of-interest regulations require employer members 29 to have a commonality-of-interest such as the same trade, 30 industry, line of business, or profession. The proposed 31 federal regulations, and the bill, also allow the commonality 32 to be based on the employer members having a principal place 33 of business in the same state or the same metropolitan area, 34 including a metropolitan area that crosses state lines. 35 -7- LSB 5672XS (5) 87 ko/rj 7/ 9

S.F. 2182 The bill requires each employer member of the association 1 to act directly as the employer of at least one employee that 2 participates in the group health plan. The bill outlines 3 the criteria for a self-employed individual to be classified 4 as both an employer and employee for purposes of joining 5 an association. Each employer member must control the 6 functions of the association by electing directors or other 7 officers of the association and the association must have an 8 organizational structure that includes a governing body and 9 bylaws. The association cannot be a health insurance issuer or 10 be controlled by one. Other requirements for an association 11 health plan to comply with federal and state requirements are 12 outlined in the bill. To ensure compliance, the bill allows 13 the commissioner of insurance to enter into an agreement 14 to exchange information with an insurance regulator in a 15 contiguous state if an association health plan has employer 16 members in this state and the contiguous state. 17 The bill outlines the nondiscrimination provisions, 18 including eligibility for coverage provisions, that an 19 association health plan must comply with. The bill requires 20 the commissioner to adopt rules to administer the bill and 21 allows the commissioner to take any enforcement action under 22 the commissioner’s authority to enforce compliance with the 23 bill. The commissioner may engage in emergency rulemaking 24 as necessary. An association health plan that meets all the 25 requirements of the bill shall not be considered an insurance 26 company or association under Code section 432.1, a member of 27 the Iowa individual health benefit reinsurance association 28 under Code section 513C.10, or a member insurer of the Iowa 29 life and health insurance guaranty association under Code 30 section 508C.5. 31 The bill amends Code section 507A.4, unauthorized insurers, 32 to update the language related to the exemption from the 33 provisions of the Code section for multiple employer welfare 34 arrangements. The bill also includes a provision to exempt 35 -8- LSB 5672XS (5) 87 ko/rj 8/ 9

S.F. 2182 association health care plans from Code section 507A.4. 1 The bill amends Code section 509.1 to allow a policy of 2 group health insurance sponsored by an association health plan 3 pursuant to the provisions of the bill to be delivered in the 4 state. The bill takes effect upon the effective date of a 5 United States department of labor’s regulation amending 29 6 C.F.R. pt. 2510 that allows the creation of association health 7 plans. 8 -9- LSB 5672XS (5) 87 ko/rj 9/ 9