Last Friday the 6th, attorneys representing the 13 Seattle Chamber association health plan trusts (BHT) made a course correction in their action against the Washington Insurance Commissioner (OIC). Even more interesting, BHT lead attorney Richard J. Birmingham filed a declaration that explains some of the oddities of the case. In the BHT “reply in support of motion for declaratory and injunctive relief,” attorneys for BHT argue that:

“because the Commissioner has now indicated that his determination with respect to the 2014 [Premera] filing will not affect the [Premera BHT] 2015 filing, [the trusts] no longer seek to enjoin his determination regarding the 2014 filing, but only seek to enjoin any determination of the 2015 filing.” [Reply at 1]

For those wondering why Premera has not been included in the litigation or the administrative hearings, Mr. Birmingham noted in his declaration that:

“On or around January 22, 2015, I spoke with representatives for Premera Blue Cross (“Premera”), who indicated that currently Premera does not intend to challenge a disapproval of the rating filing applications or the Employer 3(5) status for the Member-Group Governed Plans.” [Emphasis added, Declaration at 1]

Mr. Birmingham also revealed that the Bend Chamber of Commerce association health plan that was rejected as a bona fide association by the U.S. Department of Labor had been approved by the Oregon Insurance Department to sell large group plans again. Unlike the OIC, the Oregon Insurance Department approved the health plans filed for the new Bend Chamber “sub-trusts” as “bona fide” association trusts.

In February 2014, Pacificsource (NAIC Company Code 54976) filed legal opinion letters from the Oregon law firm Schwabe, Williamson, & Wyatt declaring that the following Bend Chamber sub-trusts met ERISA “bona fide” association status:

  1. Health Care Services
  2. Business and Professional Services
  3. Auto and Motosports
  4. Communications and Utilities
  5. Contractors
  6. Human Services
  7. Manufacturing
  8. Real Estate

Hmmmm…didn’t the Davis Wright law firm provide the same type of letters for the Seattle Chamber of Commerce in February 2014?

Essentially, in the federal court action, BHT now argues that they simply want the court to find the Seattle Chamber sub-trusts to be “bona fide” associations under ERISA. Here is the BHT argument:

  • The federal court has exclusive jurisdiction since the trust fiduciary is simply seeking a federal declaration of its ERISA status.
  • The federal court is not being asked to rule on the 2014 Premera rate and form filing disapproval nor is BHT challenging the disapproval of the 2014 filing.
  • The associations are already selling the Premera 2015 large group health plan and the OIC will probably disapprove the plan when it is filed on February 12th.
  • The associations should be permitted to continue to sell coverage until the federal court rules on ERISA status.
  • The Bend Chamber has restructured the same way as the Seattle Chamber and operate as “bona fide” associations. [True, but, no one knows what the DOL thinks about the new Bend association plans.]

On Sunday the 8th, the BHT attorneys filed a “Notice of Unavailability” from the day after Premera files the BHT health plan until February 20th. No reason was given:

“PLEASE TAKE NOTICE that Richard J. Birmingham and Christine Hawkins, the undersigned attorneys for Plaintiffs Business Health Trust and the Association or Member Group-Governed Plans, hereby notify both the Court and counsel that they will be out of the office and unavailable for all court proceedings from February 13, 2015, through February 20, 2015. The undersigned respectfully request that no actions be taken, or motions or other proceedings be set during this period of time.”