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PRINTER'S NO. 3108
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No.
2200
Session of
2020
INTRODUCED BY GAYDOS, DUNBAR, GROVE, HEFFLEY, JAMES, KEEFER,
MACKENZIE, RADER, SIMMONS, STRUZZI AND ZIMMERMAN,
JANUARY 10, 2020
REFERRED TO COMMITTEE ON INSURANCE, JANUARY 10, 2020
AN ACT
Amending Title 40 (Insurance) of the Pennsylvania Consolidated
Statutes, in regulation of insurers and related persons
generally, providing for association health plans.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. Title 40 of the Pennsylvania Consolidated
Statutes is amended by adding a chapter to read:
CHAPTER 41
ASSOCIATION HEALTH PLANS
Sec.
4101. Definitions.
4102. Policy requirements.
§ 4101. Definitions.
The following words and phrases when used in this chapter
shall have the meanings given to them in this section unless the
context clearly indicates otherwise:
"Association." As follows:
(1) A member-based organization of employer members.
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(2) The term shall include employers that are:
(i) in the same industry, trade or profession; or
(ii) domiciled or residing in this Commonwealth or
in a metropolitan area that is at least partially within
this Commonwealth.
"Employee." An individual employed by an employer.
"Employee welfare benefit plan." As the term is defined in
section 3(1) of ERISA (29 U.S.C. § 1002(1)).
"Employer." As follows:
(1) As the term is defined in section 3(5) of ERISA (29
U.S.C. § 1002(5)).
(2) The term shall include an association. For purposes
of determining employer size of an association, all of the
employees of employer members of the association shall be
aggregated and treated as employed by a single employer.
"ERISA." The Employee Retirement Income Security Act of 1974
(Public Law 93-406, 29 U.S.C. § 1001 et seq.).
"Group health plan." An employee welfare benefit plan, to
the extent that the plan provides health care service and
including items and services paid for as health care service to
employees of an employer, to employees of employer members of an
association, to small employers or to any combination of these
persons, directly or through insurance, reimbursement or
otherwise.
"Health care service." A covered treatment, admission,
procedure, medical supply or equipment or other service,
including behavioral health, prescribed or otherwise provided or
proposed to be provided by a health care provider to an insured
under a health insurance policy.
"Health insurance policy." As follows:
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(1) An insurance policy, subscriber contract,
certificate or plan that provides medical or health care
coverage, including emergency services.
(2) The term does not include any of the following:
(i) An accident only policy.
(ii) A credit only policy.
(iii) A long-term care or disability income policy.
(iv) A specified disease policy.
(v) A Medicare supplement policy.
(vi) A TRICARE policy, including a Civilian Health
and Medical Program of the Uniformed Services (CHAMPUS)
supplement policy.
(vii) A fixed indemnity policy.
(viii) A dental only policy.
(ix) A vision only policy.
(x) A workers' compensation policy.
(xi) An automobile medical payment policy.
(xii) A homeowners insurance policy.
(xiii) Another similar policy providing for limited
benefits.
"Insured." As follows:
(1) A person on whose behalf an insurer is obligated to
pay covered health care expense benefits or provide health
care services under a health insurance policy.
(2) The term includes a policyholder, certificate
holder, subscriber, member, dependent or other individual who
is eligible to receive health care services under a health
insurance policy.
"Insurer." An entity licensed by the department with
accident and health authority to issue a health insurance policy
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that is offered or governed under any of the following:
(1) The act of May 17, 1921 (P.L.682, No.284), known as
The Insurance Company Law of 1921, including section 630 and
Article XXIV of that act.
(2) The act of December 29, 1972 (P.L.1701, No.364),
known as the Health Maintenance Organization Act.
(3) Chapter 61 (relating to hospital plan corporations)
or 63 (relating to professional health services plan
corporations).
"Large employer." As follows:
(1) In connection with a group health plan or health
insurance coverage with respect to a calendar year and a plan
year, an employer that:
(i) employed an average of at least 51 employees on
business days during the preceding calendar year; and
(ii) employs at least one employee on the first day
of the plan year.
(2) The term shall include an association that includes
at least 51 employees of employer members of the association
on the first day of the plan year.
"Large group market." The health insurance market under
which individuals obtain health insurance coverage, directly or
through any arrangement, on behalf of themselves and their
dependents through a group health plan maintained by a large
employer.
"Small employer." As follows:
(1) In connection with a group health plan or health
insurance coverage with respect to a calendar year and a plan
year, an employer that:
(i) employed an average of at least one but not more
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than 50 employees on business days during the preceding
calendar year; and
(ii) employs at least two employees on the first day
of the plan year.
(2) The term shall include an association that includes
50 or fewer employees of employer members of the association
on the first day of the plan year.
§ 4102. Policy requirements.
(a) Association policies.--A policy may be issued to an
association, in which the association shall be deemed the
policyholder, if all of the following requirements are
satisfied:
(1) The policy is issued by an insurer or a foreign
health insurance issuer that is duly licensed in the state in
which the foreign health insurance issuer is domiciled as
permitted under the laws of this Commonwealth.
(2) The association:
(i) Has been actively in existence for at least two
years.
(ii) Has been formed and maintained in good faith
for purposes other than obtaining insurance.
(iii) Has a constitution and bylaws that provide the
following:
(A) The association shall hold regular meetings
not less than annually to further purposes of the
members of the association.
(B) The association shall collect dues or
solicit contributions from members of the
association.
(C) The members of the association have voting
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privileges and representation on the board governing
the association.
(iv) Does not condition membership in the
association on any health-status-related factor relating
to an individual or a dependent of the individual.
(v) Makes health insurance coverage offered through
the association available to all members of the
association regardless of any health-status-related
factor relating to the members or their dependents.
(vi) Does not make health insurance coverage offered
through the association available other than in
connection with a member of the association.
(b) Large group market plans.--If the association described
in subsection (a) includes 51 or more employees, the policy
issued to the association shall:
(1) Be treated as a large group market plan subject to
the large group market insurance regulations under the Public
Health Service Act (58 Stat. 682, 42 U.S.C. § 201 et seq.).
The policy shall be guaranteed issue and guaranteed
renewable.
(2) Be subject to the group health plan coverage
requirements under the Patient Protection and Affordable Care
Act (Public Law 111-148, 124 Stat. 119), including, but not
limited to, the prohibition against denying coverage based on
a preexisting condition.
(3) Comply with all coverage mandates applicable to a
large group market plan offered in this Commonwealth.
(4) Provide a level of coverage equal to or greater than
60%.
(c) Issuer requirements.--The health insurance issuer
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described in subsection (a)(1) that issues the policy to the
association described in subsection (a)(2) shall:
(1) Treat all of the employees who are enrolled in
coverage under the policy as a single risk pool.
(2) Set premiums based on the collective group
experience of the employees who are enrolled in coverage
under the policy.
(3) Vary premiums by age, except that the rate may not
vary by more than 5 to 1.
(4) Be prohibited from varying premiums based on gender.
(5) Except as provided in paragraph (2), be prohibited
from varying premiums based on the health status of an
employer member or an individual employee of an employer
member.
(6) Be prohibited from establishing discriminatory rules
based on the health status of an employer member or an
individual employee of an employer member for eligibility or
contribution requirements.
(d) Compliance and administration.--
(1) The association shall comply with the requirements
applicable to a plan sponsor, as that term is defined in
section 3(16)(B) of ERISA (29 U.S.C. § 1002(16)(B)).
(2) The health plan providing coverage under the policy
to employees shall be administered in accordance with the
requirements applicable to an employee welfare benefit plan.
(e) Governing board.--The association shall establish a
governing board to manage and operate the health plan. The
following shall apply:
(1) At least 75% of the governing board shall be
comprised of employees of employer members of the association
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participating in the health plan, with the remaining
percentage being comprised of representatives designated by
the association.
(2) The employees of employer members of the association
participating in the health plan shall nominate and, through
an election where each employee is given a vote, elect
members to serve on the governing board.
(3) The governing board shall be treated as a fiduciary,
as that term is described in section 3(21)(A) of ERISA (29
U.S.C. § 1002(21)(A)), and the board shall manage and operate
the health plan:
(i) For the exclusive purpose of all of the
following:
(A) Providing health benefits to employees
enrolled in coverage under the health plan.
(B) Defraying expenses relating to
administration of the health plan.
(ii) With the care, skill, prudence and diligence
under the circumstances then prevailing that a prudent
person in a similar capacity and familiar with such
matters would use in the conduct of an enterprise of a
similar character and with similar aims.
(f) Coverage.--If an employee of an employer member of the
association terminates employment with the employer member and
is subsequently reemployed by another employer member of the
association, the employee shall remain covered under the policy
issued to the association.
Section 2. This act shall take effect in 60 days.
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