C.__"Eligible employer" means a person, firm, corporation, partnership or association with a principal place of business in a location within a 40-mile radius of the principal office of an association that is actively engaged in a business that:

(1)__Employed an average of 100 or fewer full-time equivalents during the preceding calendar year, more of whom are employed in this State than any other state; or

(2)__Is a nonprofit entity licensed as a hospital under Title 22, chapter 405 and rules adopted under that chapter.

D.__"Full-time employee" means an individual who works for an eligible employer on a full-time basis with a normal workweek of 35 hours or more.

E.__"Full-time equivalents" means the total workforce of employees of an employer and is calculated for the previous calendar year by averaging the previous year's 12 monthly totals of:

(1)__The sum of full-time employees in each of the 12 months; plus

(2)__The aggregate number of eligible employees who were not full-time employees in that particular month.

A single employee may not count as more than one full-time equivalent even if the employee worked more hours per week than the full-time schedule.

2.__Requirement for approval.__The arrangement must meet the requirements of this subsection to establish a multiple-employer welfare arrangement or to maintain operations of a multiple- employer welfare arrangement.

A.__The association may consist only of eligible employers.

B.__Within 4 months following the end of the arrangement's fiscal year or within such extension of time as the superintendent for good cause may grant, the arrangement shall file with the superintendent an annual financial

report certified by an independent certified public accountant.__The report must include a letter of qualification from the accountant that meets the requirements of section 6611, subsection 1-A.__The report must provide the name and address of the insurer providing excess insurance and it must also include an analysis of the adequacy of reserves and contributions or premiums charged based on a review of past and projected claims and expenses.

C.__Within 45 days following the end of the arrangement's fiscal quarter, the arrangement shall file with the superintendent a letter from a duly authorized representative of the association, certifying that:

(1)__Excess insurance is maintained with a retention level adequate for the plan; and

(2)__Appropriate loss and loss expense reserves are maintained that are adequate for the plan.

D.__Any necessary excess insurance must be purchased from an insurer licensed to transact health or casualty insurance in this State.

E.__The association shall issue to each covered employee a contract, certificate, summary plan description or other evidence of the benefits and coverages provided.__The evidence of the benefits and coverages provided must contain in boldface print in a conspicuous location the following statement:__"The benefits and coverages described herein are provided by (name of association) on a self-insured basis, not through a contract__with a commercial insurance carrier."

F.__The association must pay the filing fee specified in section 601 at the time it submits the application for approval.

3.__Application for approval.__To obtain approval, an arrangement must submit a letter of application to the superintendent that includes or has attached the material required by subsection 2.__If any information is not available at the time of application, the arrangement must specify in the letter when that information will be provided.__The superintendent, in the superintendent's discretion, may grant approval of an arrangement conditioned upon the timely receipt of the required information if the superintendent determines that the arrangement is funded at a level consistent with the purposes of this chapter.

4.__Other provisions.__An arrangement approved pursuant to the requirements of this section is also subject to the requirements of sections 6605, 6606, 6607, 6609, 6610, 6614 and 6616.

5.__Grounds for denial, suspension or revocation of arrangement.__The superintendent, in the superintendent's discretion, may deny, suspend or revoke the authorization granted pursuant to this section if the superintendent finds that the arrangement has failed to meet the requirements of this section, has refused to produce the required financial information or has refused to correct a deficiency determined pursuant to section 6606.__When failure to maintain compliance with the requirements of this section is the grounds for suspension or revocation of authority of an arrangement, the arrangement has 60 days after notification by the superintendent to take action necessary to correct the deficiency.'

SUMMARY

The purpose of this bill is to address the changing insurance environment in the State and to provide affordable options to certain employers wishing to make health benefits available to employees. The bill:

1. Amends and relaxes the criteria for self-funded multiple employer welfare arrangements by and among certain businesses;

2. Establishes a mechanism by which certain small businesses in the same geographic region can form an association for the purpose of providing self-funded health benefit plans to employees and their dependents; and

3. Ensures that employees participating in such self-funded arrangements are protected by imposing certain safeguards, including oversight by the Superintendent of Insurance.