Following a still unreleased settlement between the Business Health Trusts (BHT) and the Washington Insurance Commissioner (OIC), BHT attorneys withdrew the remaining administrative and federal court actions challenging the OIC denial of BHT’s “bona fide” association status under ERISA. The withdraw of the administrative appeals can be found here and withdraw of the Oregon federal court case here.

Associated industries announced the settlement with the OIC here and their plan availability here. In the absence of the terms of the settlement, little is known about how the associations navigated the state regulatory approval process given the federal judge’s conclusion in the Oregon summary judgment decision.

The legal issues relate to federal law and ERISA in particular; thus, the most commonly asked question right now is this – How do you square a state settlement that allows continuation of the associated industries plans given the Oregon federal judge’s opinion in July?

…plaintiffs present insufficient information to establish that Associated Industries’ employer members have a “history of organized cooperation on employment-related matters and a genuine organizational relationship through their membership” in Associated Industries. Plaintiffs maintain that Associated Industries has a history of sponsoring organized activities, including economic activities, educational opportunities, industry training, business promotions, and other events and seminars relating to the commercial construction industry. However, plaintiffs do not clarify whether and to what degree Associated Industries’ employer members participate in these activities, and plaintiffs provide no documentation of these events or activities. Further, plaintiffs provide limited information regarding the Associated Industries’ employer members who participate in the Health Benefit Trust, and whether those members, in form and in substance, actually control the relevant Health Benefit Trust. Therefore, I find that questions of fact preclude summary judgment.

As to the remaining Industry Groups, their bylaws generally limit membership to specific industry employers within Washington State. While industry alignment may establish a bona fide employer association, a “genuine organizational relationship” must nonetheless exist between the members. As with Associated Industries, I find that plaintiffs present insufficient evidence to establish, as a matter of law, such a relationship between and amongst the employer members of each Industry Group. [citations omitted Order at 9 – 10, July 16, 2015]

Associations, insurance producers, and carriers want to know what they need to do to get back in business. What additional information provided to the OIC by the associations led to approval of their association health plans? The best guess is that the OIC has decided not to determine bona fide status of associations.

My advice is to wait until the OIC announces clarification of its filing requirements and releases the settlement agreement. Right now, we don’t have the answers.

Conjecture is not a foundation for business planning.