On Dec. 17, 2014, the District of Columbia (DC) Department of Insurance, Securities and Banking published Bulletin 14-IB-01-12/17. The new bulletin is addressed to health insurers and relates to health insurance coverage sold to associations and MEWAs located in DC, as well as health insurance coverage sold to small DC employers by captive insurers domiciled outside of DC.
Regarding association coverage, the federal government (CMS) previously issued guidance in 2011 relating to PPACA’s individual and group insurance mandates when insurance is sold to, or through, associations. Under that guidance, CMS states that in most association situations, the group health plan exists at the individual employer level and not at the association-of-employers level. Thus, in these situations, the size of each individual employer participating in the association determines whether that employer’s coverage is subject to the small or large group market rules (most PPACA insurance mandates apply only to small groups).
A 'mixed' association is where different members have coverage that is subject to the individual, small, and/or large group market rules, as determined by each employer member’s status. According to the bulletin, an association cannot aggregate the employees of the member employers in an attempt to qualify as a large employer. Accordingly, each employer member of a mixed association must receive coverage that complies with the requirements arising out of their own status as an individual, small employer or large employer. Further, since under DC law individual and small group health plans must be sold only through DC Health Link (the DC-established health insurance exchange), each small employer association member must purchase insurance through DC Health Link.
Regarding MEWAs and captives, if a MEWA solicits or provides health benefits to one or more employers domiciled in DC, the MEWA is subject to DC insurance laws (regardless of whether the MEWA is regulated under ERISA or is domiciled in DC). DC law does allow an exemption for MEWAs maintained or established by a single employer that are self-insured (and that are not considered a governmental plan). The bulletin further describes allowable situations for fully insured MEWAs, including requirements for MEWAs that establish a trust in order to provide group health benefits.
Lastly, the bulletin addresses captive insurers, MEWAs and associations that are acting as insurers—selling or otherwise issuing or making available health insurance policies to more than one small employer located in DC. In that situation, the captive insurer, MEWA or association will be deemed to be engaged in the business of selling health insurance in DC, and therefore must obtain a certificate of authority from the Department. In addition, DC law requires a policy, certificate or coverage for a health benefit plan offered to a DC employer to be filed with the and approved by the Department—including coverage issues to an out-of-DC trust or association or by a captive.
Employers considering obtaining coverage through an association, MEWA or captive arrangement should carefully review the bulletin to better understand their rights and obligations relating to the coverage.
Bulletin 14-IB-01-12/17 »