If you read the last article on MEWAs here, you noticed that different laws define what it means to be a “bona fide association” for health insurance purposes. I won’t repeat those observations. However, you might want to watch the National Association of Insurance Commissioners (NAIC) draft model law that proposes to define “bona fide associations” for state small group markets. The proposal going into the Summer National meeting in Atlanta throws associations “under the bus” unless the association serves a single profession requiring a state license or certification to practice, e.g., doctors and lawyers. Forget about the farmers, ranchers, businessmen, mechanics, and “ordinary” workers.

The latest draft was released on July 30, 2012. Here is the actual proposed definition:

Bona fide association” means an association that meets all of the following criteria:
(1) Serves a single profession that requires a significant amount of education, training or experience, or a license or certificate from a state authority to practice that profession;
(2) Has been actively in existence for five (5) years;
(3) Has a constitution and by-laws or other analogous governing documents;
(4) Has been formed and maintained in good faith for purposes other than obtaining insurance;
(5) Is not owned or controlled by a carrier or affiliated with a carrier;
(6) Does not condition membership in the association on any health status-related factor;
(7) Has at least 1,000 members if it is a national association; 500 members if it is a state association; or 200 members if it is a local association;
(8) All members and dependents of members are eligible for coverage regardless of any health status related factor;
(9) Does not make health benefit plan offered through the association available other than in
connection with a member of the association;
(10) Is governed by a board of directors and sponsors annual meetings of its members; and
(11) Producers only market association memberships, accept applications for membership, or sign up members in the professional association where the subject individuals are actively engaged in, or directly related to, the profession represented by the association.

So here’s the big question: How will this affect the interpretation and application of “association of employers” under ERISA?

Bonus question: Does the NAIC understand the difference between ERISA definitions and this proposal?

Finally, this rhetorical question: Do you think Insurance Commissioners see a role for ERISA qualified, bona fide associations counted as large group under health care reform?

Here is the link to the June interim meeting draft with comment letters.

I see “dead people.”


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