The Washington Insurance Commissioner (OIC) stepped up its game and offered its clearest explanation yet as to why the OIC rejected the Seattle Chamber of Commerce association health plan reorganization. On June 1st, the OIC responded to the Business Health Trusts (BHT) motion for summary judgment in Seattle federal court, concluding:

“Plaintiffs lack standing, and this court lacks jurisdiction, under the single legal theory Plaintiffs have presented. Moreover, plaintiffs have failed to demonstrate that there is no material genuine issue of material fact. Plaintiffs have not demonstrated that they are entitled to summary judgment declaring them to be “employers” for the purposes of the Affordable Care Act.”

The OIC provided each of the filings made by Premera on behalf of the 13 “trusts” created by the Seattle Chamber of Commerce in a reorganization of the Chamber plan designed to establish health plan programs dedicated to particular types of industries. Here are the Premera filings provided to the court by the OIC:

  1. Aerospace
  2. Agriculture
  3. Business Services
  4. Community Service Organizations
  5. Construction
  6. End-Line Manufacturers
  7. Healthcare Industry
  8. Information Technology
  9. Media Industry
  10. Retail (plus this)
  11. Tourism (plus this)
  12. Transportation
  13. Wholesale Industry

Unlike regulatory disputes over association health plan rates, this federal action challenges OIC disapproval of Premera’s filings based upon qualification of BHT plans as “bona fide” associations entitled to treatment as large group plans. The OIC provided the court with the agency’s summary of development of market transition rules for approval of bona fide association status.

Generally, a request for summary judgment presumes no genuine factual dispute, only a legal dispute. The OIC demonstrates the weakness of the BHT motion for summary judgment by revealing clear questions of fact particular to the various trusts. BHT’s greatest vulnerability exploited by the OIC relate to the timing and similarity of the creation of the various trusts. Here are samples from the OIC argument to the federal judge contained in the OIC’s opposition to summary judgment.

The bylaws, trust documents, attorney opinions, fiduciary certifications, and descriptions submitted to the Commissioner were nearly identical for all 13 associations. [at 18]

 In fact, the fiduciary signing the 13 certifications, Maud Daudon, is also the President and CEO of the Chamber.  The only membership applications submitted by Premera were applications to become members of the trust, not members of the associations. [at 18]

The objective facts appear to be: the timing of the creation of the associations and trusts, the striking similarity of the materials submitted; BHT’s previous roles in offering health plans to the members of all 13 associations; and the Chamber’s apparently significant involvement in any and all activities conducted by members of the associations prior to 2014. The evidence indicates that the Chamber and BHT, not the associations or their members, were the ones primarily responsible for the formation of the associations. [at 19]

It appears that although on paper the associations govern the trusts that secure health coverage, in substance BHT and the Chamber directed the negotiation, selection and administration of health plans. [at 21]

In response to the Oregon Insurance Commissioner’s approval of a large group health plan for a similar reorganization by the Bend Chamber of Commerce, the Washington Commissioner says:

[BHT urges] this Court to ignore, or at the very least, minimize its consideration ofthe 2008 DOL opinion concerning the Bend Chamber of Commerce (DOL Advisory Opinion 2008-07A), because the Oregon Insurance Commissioner has approved the Bend Chamber of Commerce Plans. Dkt. #37 23.

However, Plaintiffs provide no indication the DOL has approved or agreed with the Oregon Commissioner’s decision. Further, according to the material submitted by Plaintiffs, the plan approved in Oregon, the “Bend Chamber of Commerce Employee Benefit Plan and Trust for Real Estate Employers” was not issued to a separate association of employers, but to the Bend Chamber of Commerce.

If the Bend Chamber of Commerce truly reorganized its structure in a manner similar to Plaintiffs, then Plaintiff’s argument actually supports the Commissioner’s conclusion that it is the Chamber, not the 13 associations, that formed, solicited, created, managed, and controlled the health plans Premera sold to the 13 associations. [at 22]

BHT requested and was granted a one week delay in responding to the OIC given the many filing exhibits submitted by the OIC to the court.

I don’t think another review of the association plan filings will help BHT lawyers.