HF 2403 (LSB 5415HV (1) 88)

HOUSE FILE 2403

BY  COMMITTEE ON COMMERCE

(SUCCESSOR TO HSB 543)

A BILL FOR

An Act relating to health insurance and the insurance division of the department of commerce, and providing for fees.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  NEW SECTION.  505.18A  State innovation waiver.
   1.  The commissioner may develop by rule a state innovation waiver pursuant to section 1332 of the federal Patient Protection and Affordable Care Act, Pub. L. No. 111-148. 
   2.  The commissioner may submit an application on behalf of the state to the United States secretary of health and human services and the United States secretary of the treasury for the state innovation waiver developed pursuant to subsection 1.
   3.  If a state innovation waiver submitted pursuant to subsection 2 is approved by the United States Secretary of health and human services and the United States secretary of the treasury, the commissioner may implement the state innovation waiver in a manner consistent with applicable state and federal law.
   4.  The commissioner may adopt emergency rules under section 17A.4, subsection 3, and section 17A.5, subsection 2, paragraph “b”, to implement the provisions of this section and the rules shall be effective immediately upon filing unless a later date is specified in the rules. Any rules adopted in accordance with this section shall also be published as a notice of intended action as provided in section 17A.4.
    Sec. 2.  Section 507A.4, subsection 9, Code 2020, is amended by striking the subsection and inserting in lieu thereof the following:
   9.  Transactions involving a multiple employer welfare arrangement as defined in section 3 of the federal Employee Retirement Income Security Act of 1974, 29 U.S.C. §1002, paragraph 40, or a multiple employer welfare arrangement formed as an association health plan pursuant to 29 C.F.R. pt. 2510, that meets the requirements of chapter 513D.
    Sec. 3.  Section 509.1, subsection 9, Code 2020, is amended to read as follows:
   9.  A policy of group health insurance coverage issued to an associated health plan a multiple employer welfare arrangement pursuant to section 513D.1 chapter 513D that is subject to regulation by the commissioner.
    Sec. 4.  Section 509.19, subsection 2, paragraph d, Code 2020, is amended to read as follows:
   d.  A multiple employer welfare arrangement, as defined in section 3 of the federal Employee Retirement Income Security Act of 1974, 29 U.S.C. §1002(40), paragraph 40, or a multiple employer welfare arrangement formed as an association health plan pursuant to 29 C.F.R. pt. 2510, that meets the requirements of section 507A.4, subsection 9, paragraph “a” 

chapter 513D.
    Sec. 5.  Section 513D.1, Code 2020, is amended by striking the section and inserting in lieu thereof the following:
   513D.1  Multiple employer welfare arrangements and association health plans.
   1.  As used in this chapter, unless the context otherwise requires:
   a.  “AHP” means a multiple employer welfare arrangement formed as an association health plan pursuant to 29 C.F.R. pt. 2510.
   b.  “Commissioner” means the commissioner of insurance.
   c.  “MEWA” means a multiple employer welfare arrangement as defined in section 3 of the federal Employee Retirement Income Security Act of 1974, 29 U.S.C. §1002, paragraph 40.
   2.  An AHP or MEWA that offers a plan to or maintains a group health plan for any resident of this state shall be subject to the jurisdiction of the commissioner and shall comply with all of the following requirements:
   a.  The AHP or MEWA must be administered by an insurer authorized to do the business of insurance in this state or an authorized third-party administrator that holds a current certificate of registration pursuant to section 510.21.
   b.  The AHP or MEWA must be established by a trade, industry, or professional association of employers that has a constitution or bylaws, is organized and maintained in good faith, and has membership stability as defined by rules adopted by the commissioner.
   c.  The AHP or MEWA must register with the commissioner and obtain and maintain a certificate of registration issued by the commissioner.
   d.  The AHP or MEWA shall comply with all rules and solvency standards established by rules adopted by the commissioner.
   3.  An AHP or MEWA that does not meet the solvency standards pursuant to subsection 2, paragraph “d”, shall be subject to chapter 507C.
   4.  An AHP or MEWA that meets all of the requirements of subsection 2 shall not be considered any of the following:
   a.  An insurance company or association of whatever kind or character pursuant to section 432.1.
   b.  A member of the Iowa individual health benefit reinsurance association pursuant to section 513C.10, subsection 1.
   c.  A member insurer of the Iowa life and health insurance guaranty association pursuant to section 508C.5.
   5.  An AHP or MEWA that is registered with the commissioner pursuant to subsection 2, paragraph “c”, shall annually file with the commissioner on or before March 1 a copy of the report required to be filed by the AHP or MEWA with the United States department of labor pursuant to 29 C.F.R. §2520.101-2.
   6.  An AHP or MEWA that is registered with the commissioner pursuant to subsection 2, paragraph “c”, shall annually file with the commissioner a report on or before March 1 for the preceding calendar year. The annual report shall contain the information and be in a form and manner as prescribed by the commissioner.
   7.  A foreign or domestic AHP or MEWA doing business in the state shall pay fees as prescribed by the commissioner unless otherwise provided by law.
   8.  A MEWA that is recognized as tax-exempt under Internal Revenue Code section 501(c)(9) and that is registered with the commissioner prior to January 1, 2018, shall not be considered an AHP unless the MEWA affirmatively elects to be treated as an AHP.
    Sec. 6.  Section 513D.2, subsection 1, Code 2020, is amended to read as follows:
   1.  The commissioner of insurance shall adopt rules, as necessary, pursuant to chapter 17A to administer this chapter.
EXPLANATION
The inclusion of this explanation does not constitute agreement with
the explanation’s substance by the members of the general assembly.
   This bill relates to health insurance and the insurance division of the department of commerce.
   The bill authorizes the commissioner of insurance to develop by rule a state innovation waiver (waiver) pursuant to section 1332 of the federal Patient Protection and Affordable Care Act, Pub. L. No. 111-148, and to submit an application on behalf of the state to the United States secretary of health and human services and the United States secretary of the treasury (secretaries) for the waiver. If a waiver is approved by the secretaries, the commissioner is authorized to implement the waiver in a manner consistent with applicable state and federal law. The bill authorizes the commissioner to adopt emergency rules to implement the waiver and the rules are to be effective immediately upon filing unless a later date is specified in the rules. Any rules that are adopted must also be published as a notice of intended action as provided in Code section 17A.4.
   The bill amends Code section 507A.4 and provides that Code chapter 507A (unauthorized insurers) does not apply to a multiple employer welfare arrangement (MEWA) or a MEWA formed as an association health plan (AHP) that meets the requirements of Code chapter 513D. The bill strikes current Code section 513D.1 (association health plans) and replaces it with new provisions which detail the requirements for MEWAs and AHPs that offer a plan to or that maintain a group health plan for any resident of Iowa. An “AHP” is defined in the bill as a MEWA formed as an association health plan pursuant to 29 C.F.R. pt. 2510. A “MEWA” is defined in the bill as a multiple employer welfare arrangement as defined in section 3 of the federal Employee Retirement Income Security Act of 1974, 29 U.S.C. §1002, paragraph 40.
   The bill requires an AHP or MEWA to be administered by either an insurer authorized to do the business of insurance in this state, or by an authorized third-party administrator that holds a current certificate of registration. The AHP or MEWA must be established by a trade, industry, or professional association of employers that has a constitution or bylaws, is organized and maintained in good faith, and has membership stability as defined by rules adopted by the commissioner. The AHP or MEWA must register with the commissioner and obtain and maintain a certificate of registration issued by the commissioner. The bill requires that an AHP or MEWA must comply with all rules and solvency standards established by rules adopted by the commissioner, and failure to do so subjects the AHP or MEWA to Code chapter 507C (insurers supervision, rehabilitation, and liquidation). An AHP or MEWA that meets all of the requirements is not considered an insurance company or association of whatever kind or character under Code section 432.1 (tax on gross premiums —— exclusions), a member of the Iowa individual health benefit reinsurance association, or a member insurer of the Iowa life and health insurance guaranty association.
   The bill requires AHPs and MEWAs that are registered with the commissioner to annually file with the commissioner on or before March 1 a copy of the report required to be filed by the AHP or MEWA with the United States department of labor pursuant to 29 C.F.R. §2520.101-2. The AHP and MEWA must also file an annual report with the commissioner on or before March 1 that covers the preceding calendar year. The annual report must contain the information and be in a form and manner as prescribed by the commissioner.
   A foreign or domestic AHP or MEWA doing business in the state is required by the bill to pay fees as prescribed by the commissioner unless otherwise provided by law.
   The bill provides that a MEWA that is recognized as tax-exempt under Internal Revenue Code section 501(c)(9), and that is registered with the commissioner prior to January 1, 2018, shall not be considered an AHP unless the MEWA affirmatively elects to be treated as an AHP.
   The bill makes conforming changes to Code sections 509.1(9) and 509.19(2).