H.R. 241 (Sam Johnson)

FEHBP Expansions

Target population(s)
No provision.

Eligibility
No provision.

Choice of health insurance plans
No provision.

Premiums
No provision.

Enrollment process
No provision.

Effective date
No provision.

COBRA Continuation Coverage

Duration of coverage
No provision.

Nature of COBRA coverage
No provision.

Other
No provision.

Pooling Mechanisms (Purchasing Groups, Association Plans, High Risk Pools for Medically Uninsurable)

Pooling mechanism
Provides for the sale of health insurance coverage (insured or self-insured) through Association Health Plans (AHPs). An AHP is a group health plan whose sponsor is: a bona fide trade, industry, or professional association; a rural electric or telephone cooperative; or a bona fide chamber of commerce (or similar organization). An AHP would have to be organized for substantial purposes other than that of obtaining or providing medical care. It would have to be a permanent entity and receive the active support of its members (that is, employers). It could not make membership, dues, or coverage under the health plan dependent on any health status-related factor (such as past or current medical history or claims experience) of the employees of its members (or dependents). It also could not require participation in the AHP's health plan as a condition of membership.

Pooling mechanism target population
Small employers, including self-employed sole proprietors, their employees and dependents. (Although this is the target group, no size limit is imposed on employers who wish to become members of the AHP. Rules are also specified for participation of affiliated employers.) AHPs would be prohibited from excluding eligible employers unless such employers failed to meet minimum group participation and premium contribution requirements. (These typically require an employer to enroll a minimum of some percentage of its employees into the health plan and for the employer to contribute at least a specific proportion of the total premium.)

Pooling mechanism eligibility requirements
Any employer that was a member of the AHP, or an affiliated member, would be eligible to participate in the health insurance coverage options offered by the AHP. The employer's active or retired owner, officer, director, employees or the beneficiaries of such individuals would be eligible to obtain coverage through the AHP.

Requirements on pooling mechanism
AHPs would have to be certified by the Secretary of Labor (or by a state to which authority has been delegated by the Secretary). Certification requirements include rules relating to the sponsors and to the boards of trustees; participation and coverage; plan documents, contribution rates, and benefit options; and maintenance of reserves and provisions for financial solvency. AHPs offering self insured coverage would have to meet additional requirements relating to the number of covered persons (a minimum of 1,000 persons), reserves, solvency, and payments to a federal solvency fund, to be known as the Association Health Plan Fund. Fully-insured AHPs could be certified as a class (i.e., the regulator would not have to review each separate AHP seeking certification). The class would comprise all insured AHPs in a state. A self-insured entity offering health insurance coverage at the time of enactment could only qualify for certification as an AHP if its participating employers: (1) represented a broad cross section of trades, businesses, or industries, (2) were of average or above average risk, or (3) were from one of a number of listed industries (e.g., agriculture, cosmetology, food service establishments, etc.). Each entity seeking certification as an AHP would be required to pay a $5,000 filing fee to the Department of Labor. An AHP could not vary its premium rates for any participating employer based on any health status-related factors (e.g., claims experience or medical condition) associated with the employer's employees and dependents, and also could not vary its rates based on the employer's type of business or industry. An AHP or an insurer of AHP coverage could, however, vary the premiums charged to its different member employers on the basis of the age, gender, location, and other demographic characteristics of the particular employer's employees. Moreover, the AHP or insurer of an AHP could vary an employer's premium to the extent that such rates are allowed to vary under state premium regulation for bona fide associations. An insurer of AHP coverage could also set an employer's premium based on the overall claims experience of the pool of insureds covered by the AHP's plan. (Insurers could, therefore, charge different rates to different AHPs based on the claims experience of the specific AHP.) Pooling arrangements maintained in a State that have at least 200 participating employers that make contributions to such arrangement, have been in existence for 10 years, and meet other specified requirements would be deemed to meet the requirements for an AHP.

Role of pool in providing health insurance
An AHP would make coverage available to its members and their employees. Its board of trustees would have to perform a variety of duties relating to operation and financial controls of the entity. The AHP would also have to file various documents with regulators.

Types of coverage that pooling mechanisim must offer
An AHP could offer insured or self-insured health plans.

Requirements on health insurance issuers selling to the pooling mechanism
Insurers selling coverage through an AHP would have to comply with the HIPAA requirements relating to portability and guaranteed renewability. State laws that have the effect of preventing an insurer from offering health insurance coverage in connection with a certified AHP would be preempted.

Federal preemption (override) of state laws
AHPs would be exempt from most state laws governing health insurance, including state mandated benefit laws, state laws regulating small group health insurance coverage (e.g., rating requirements), state marketing requirements, and state solvency standards. State laws limiting the ability of health insurance issuers to offer specific policies to AHPs also would be preempted. In addition, state laws would be preempted that prevent a health insurance issuer from offering coverage of the same policy type to other employers operating in the state, whether or not such other employers were participating in an AHP. (Once a state approved such a policy, the issuer could also offer the policy in any other state, exempt from the laws of those states.) States could assess premium taxes on AHPs that provide any self-insured coverage if the AHPs began operations after enactment of the bill (this tax would be reduced if certain conditions were met). Any state assessments on insurers to support the financing of state high-risk pools, however, would be preempted.

Federal financial incentives to encourage establishment of pooling mechanisms
No provision.

Administration and required studies
The Secretary of Labor could delegate to the states responsibility for AHP certification and other duties. The Secretary would be required to issue implementing regulations for the AHP provisions within one year of enactment. Such regulations would be issued through negotiated rulemaking. The Secretary of Labor would be given new enforcement authority with respect to AHPs that do not comply with requirements and would act as trustee of any AHP that became insolvent subject to appointment by a federal court. The Secretary would also administer the Association Health Plan Fund that would cover certain obligations of an AHP in the event of its insolvency or termination. Requires the Secretary of Labor to report by January 1, 2012 to the House Committee on Education and Workforce and the Senate Committee on Health, Education, Labor, and Pensions the effect AHPs have had, if any, in reducing the number of uninsured individuals.

Effective date
Generally effective one year after enactment.

Other Provisions

Other
None