Bill Summary for H 464 (2019-2020)

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Summary date: 

Mar 26 2019

Bill Information:

View NCGA Bill Details2019-2020 Session
House Bill 464 (Local) Filed Tuesday, March 26, 2019
Intro. by K. Hall, Grange, Dobson, B. Turner.

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Bill summary

Enacts Article 50A, Association Health Plans, to GS Chapter 58. Requires all association health plans delivered or issued for delivery in the State to be in compliance with GS Chapter 58, regardless of the domicile of the sponsoring association receiving the policy. Defines associated health plan to mean a fully insured group health insurance policy sponsored by a sponsoring association and offered or sold to members of the sponsoring association, to provide health benefits, as permitted under the Employee Retirement Income Security Act of 1974, its implementing regulations, and GS Chapter 58. Defines sponsoring association to mean an association comprised of one or more employer members that provides an association health plan to its employer members; provided that it meets the other requirements of Article 50A, a sponsoring association is treated as an employer of a single group health plan under the Employee Retirement Income Security Act of 1974, its implementing regulations, and GS Chapter 58. Defines employer member to mean a sole proprietorship, or an individual or entity employing at least one person, which is a member of a sponsoring association.

Prohibits any insurer from delivering or issuing for delivery an association health plan (plan) to a sponsoring association unless the sponsoring association meets five specified requirements, including (1) having at least one substantial business purpose unrelated to the offering and providing of health insurance or other employee benefits to its employer members and their employees, (2) having registered as a multiple employer welfare arrangement (MEWA) with the Insurance Commissioner, and (3) having a commonality of interest shared among the employer members based on either the establishment by employer members in the same trade/industry/business/profession, or by employer members as a statewide association in an area that does not exceed State boundaries.

Sets out employer membership requirements to obtain coverage under a plan, requiring the employer member to be a member of the sponsoring association and either be domiciled or have a principal headquarters or administrative office in the State, or be licensed by the State agency for the employer member's industry, trade, or profession. Limits the provision of coverage to eligible employees and individuals paid on an IRS Form 1099, as specified. Requires employer members to commit to remaining members of the sponsoring association and receiving and paying for benefits under the plan for a period of at least two years.

Sets four criteria a plan must meet, including that the plan can neither be offered nor advertised to the public generally, and the plan must provide a level of coverage that is at least 60% of the actuarial value of allowed costs for covered benefits. 

Requires a sponsoring association to meet five specified solvency requirements before it can be delivered or issued for delivery of a plan.

Prohibits a plan or sponsoring association from conditioning eligibility for coverage on any health-status factor, including claims experience, evidence of insurability, and disability, among others. Permits a plan or sponsoring association to make rating distinctions among its employer members on factors other than health-status factors, so long as the rating distinction is not directed at individual beneficiaries or based on a health factor specifically identified by the statute. Prohibits plans from imposing limitations based on preexisting conditions. Clarifies that the statute does not require a plan to provide particular benefits other than those provided in the plan's terms, or otherwise required by law, nor prevents the plan from establishing limitations or restrictions on the amount, level, extent, or nature of the benefits or coverage for similarly situated individuals enrolled in the plan. 

Prohibits a plan or sponsoring association from requiring any individual, as a condition of initial or continued enrollment in the plan, to pay a premium or contribution greater than the premium or contribution for a similarly situated individual enrolled in the plan on the basis of any health-status factor in relation to the individual or to an individual enrolled in the plan as a dependent of the individual. Clarifies that the statute does not restrict the amount an insurer can charge for coverage under a plan, or prevent an insurer from establishing premium discounts or modifying otherwise applicable co-payments or deductibles for an association health plan in return for adherence to programs of health promotion and disease prevention.

Specifies that Article 50A does not preclude a sponsoring association from engaging a broker or agent licensed to sell insurance in the State for purposes of reviewing and considering any plan.

Applies to contracts entered into, amended, or renewed on or after January 1, 2020.