Association Health Plans Act

IB Union Calendar No. 87 118TH CONGRESS 1ST SESSION H. R. 2868 [Report No. 118–112] To amend the Employee Retirement Income Security Act of 1974 to clarify the treatment of certain association health plans as employers, and for other purposes. IN THE HOUSE OF REPRESENTATIVES APRIL 25, 2023 Mr. WALBERG (for himself, Ms. FOXX, Mr. GOOD of Virginia, Mr. ALLEN, Mr. CRENSHAW, and Mr. BURGESS) introduced the following bill; which was referred to the Committee on Education and the Workforce JUNE 14, 2023 Additional sponsors: Mr. THOMPSON of Pennsylvania and Mr. DUNN of Florida JUNE 14, 2023 Reported with an amendment, committed to the Committee of the Whole House on the State of the Union, and ordered to be printed [Strike out all after the enacting clause and insert the part printed in italic] [For text of introduced bill, see copy of bill as introduced on April 25, 2023] VerDate Sep 11 2014 23:59 Jun 14, 2023 Jkt 039200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6652 E:\BILLS\H2868.RH H2868 pbinns on DSKJLVW7X2PROD with $$_JOB 2 •HR 2868 RH A BILL To amend the Employee Retirement Income Security Act of 1974 to clarify the treatment of certain association health plans as employers, and for other purposes. VerDate Sep 11 2014 23:59 Jun 14, 2023 Jkt 039200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6652 E:\BILLS\H2868.RH H2868 pbinns on DSKJLVW7X2PROD with $$_JOB 3 •HR 2868 RH Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Association Health 4 Plans Act’’. 5 SEC. 2. TREATMENT OF GROUP OR ASSOCIATION OF EM- 6 PLOYERS. 7 (a) IN GENERAL.—Section 3(5) of the Employee Re- 8 tirement Income Security Act of 1974 (29 U.S.C. 1002(5)) 9 is amended— 10 (1) by striking ‘‘The term’’ and inserting ‘‘(A) 11 The term’’; and 12 (2) by adding at the end the following: 13 ‘‘(B) For purposes of subparagraph (A), a group or 14 association of employers shall be treated as an ‘employer’, 15 regardless of whether the employers composing such group 16 or association are in the same industry, trade, or profes- 17 sion, if such group or association— 18 ‘‘(i)(I) has established and maintains an em- 19 ployee welfare benefit plan that is a group health 20 plan (as defined in section 733(a)(1)); 21 ‘‘(II) provides coverage under such plan to at 22 least 51 employees after all of the employees employed 23 by all of the employer members of such group or asso- 24 VerDate Sep 11 2014 23:59 Jun 14, 2023 Jkt 039200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6203 E:\BILLS\H2868.RH H2868 pbinns on DSKJLVW7X2PROD with $$_JOB 4 •HR 2868 RH ciation have been aggregated and counted together as 1 described in subparagraph (D); 2 ‘‘(III) has been actively in existence for at least 3 2 years prior to establishing and maintaining an em- 4 ployer welfare benefit plan that is a group health 5 plan (as defined in section 733(a)(1)); 6 ‘‘(IV) has been formed and maintained in good 7 faith for purposes other than providing medical care 8 (as defined in section 733(a)(2)) through the purchase 9 of insurance or otherwise; 10 ‘‘(V) does not condition membership in the group 11 or association on any health status-related factor (as 12 described in section 702(a)(1)) relating to any indi- 13 vidual; 14 ‘‘(VI) makes coverage under such plan available 15 to all employer members of such group or association 16 regardless of any health status-related factor (as de- 17 scribed in section 702(a)(1)) relating to such em- 18 ployer members; 19 ‘‘(VII) does not provide coverage under such plan 20 to any individual other than an employee of an em- 21 ployer member of such group or association; 22 ‘‘(VIII) has established a governing board with 23 by-laws or other similar indications of formality to 24 manage and operate such plan in both form and sub- 25 VerDate Sep 11 2014 23:59 Jun 14, 2023 Jkt 039200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6203 E:\BILLS\H2868.RH H2868 pbinns on DSKJLVW7X2PROD with $$_JOB 5 •HR 2868 RH stance, of which at least 75 percent of the board mem- 1 bers shall be made up of employer members of such 2 group or association participating in the plan that 3 are duly elected by each participating employer mem- 4 ber casting 1 vote during a scheduled election; 5 ‘‘(IX) is not a health insurance issuer (as defined 6 in section 733(b)(2)), and is not owned or controlled 7 by such a health insurance issuer or by a subsidiary 8 or affiliate of such a health insurance issuer, other 9 than to the extent such a health insurance issuer— 10 ‘‘(aa) may participate in the group or asso- 11 ciation as a member; and 12 ‘‘(bb) may provide services such as assist- 13 ance with plan development, marketing, and ad- 14 ministrative services to such group or associa- 15 tion; 16 ‘‘(ii) meets any set of criteria to qualify for such 17 treatment in an advisory opinion issued by the Sec- 18 retary prior to the date of enactment of the Associa- 19 tion Health Plans Act; or 20 ‘‘(iii) meets any other set of criteria to qualify 21 for such treatment that the Secretary by regulation 22 may provide. 23 ‘‘(C)(i) For purposes of subparagraph (B), a self-em- 24 ployed individual shall be treated as— 25 VerDate Sep 11 2014 23:59 Jun 14, 2023 Jkt 039200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6203 E:\BILLS\H2868.RH H2868 pbinns on DSKJLVW7X2PROD with $$_JOB 6 •HR 2868 RH ‘‘(I) an employer who may become a member of 1 a group or association of employers; 2 ‘‘(II) an employee who may participate in an 3 employee welfare benefit plan established and main- 4 tained by such group or association; and 5 ‘‘(III) a participant of such plan subject to the 6 eligibility determination and monitoring require- 7 ments set forth in clause (iii). 8 ‘‘(ii) For purposes of this subparagraph, the term ‘self- 9 employed individual’ means an individual who— 10 ‘‘(I) does not have any common law employees; 11 ‘‘(II) has an ownership right in a trade or busi- 12 ness, regardless of whether such trade or business is 13 incorporated or unincorporated; 14 ‘‘(III) earns wages (as defined in section 3121(a) 15 of the Internal Revenue Code of 1986) or self-employ- 16 ment income (as defined in section 1402(b) of such 17 Code) from such trade or business; and 18 ‘‘(IV) works at least 10 hours per week or 40 19 hours per month providing personal services to such 20 trade or business. 21 ‘‘(iii) The board of a group or association of employers 22 shall— 23 ‘‘(I) initially determine whether an individual 24 meets the requirements under clause (ii) to be consid- 25 VerDate Sep 11 2014 23:59 Jun 14, 2023 Jkt 039200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6203 E:\BILLS\H2868.RH H2868 pbinns on DSKJLVW7X2PROD with $$_JOB 7 •HR 2868 RH ered a self-employed individual for the purposes of 1 being treated as an— 2 ‘‘(aa) employer member of such group or as- 3 sociation (in accordance with clause (i)(I)); and 4 ‘‘(bb) employee who may participate in the 5 employee welfare benefit plan established and 6 maintained by such group or association (in ac- 7 cordance with clause (i)(II)); 8 ‘‘(II) through reasonable monitoring procedures, 9 periodically determine whether the individual con- 10 tinues to meet such requirements; and 11 ‘‘(III) if the board determines that an individual 12 no longer meets such requirements, not make such 13 plan coverage available to such individual (or de- 14 pendents thereof) for any plan year following the plan 15 year during which the board makes such determina- 16 tion. If, subsequent to a determination that an indi- 17 vidual no longer meets such requirements, such indi- 18 vidual furnishes evidence of satisfying such require- 19 ments, such individual (and dependents thereof) shall 20 be eligible to receive plan coverage. 21 ‘‘(D) For purposes of subparagraph (B), all of the em- 22 ployees (including self-employed individuals) employed by 23 all of the employer members (including self-employed indi- 24 viduals) of a group or association of employers shall be— 25 VerDate Sep 11 2014 23:59 Jun 14, 2023 Jkt 039200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6203 E:\BILLS\H2868.RH H2868 pbinns on DSKJLVW7X2PROD with $$_JOB 8 •HR 2868 RH ‘‘(i) treated as employed by a single employer; 1 and 2 ‘‘(ii) aggregated and counted together for pur- 3 poses of any regulation of an employee welfare benefit 4 plan established and maintained by such group or as- 5 sociation.’’. 6 (b) DETERMINATION OF EMPLOYER OR JOINT EM- 7 PLOYER STATUS.—The provision of employee welfare ben- 8 efit plan coverage by a group or association of employers 9 shall not be construed as evidence for establishing an em- 10 ployer or joint employer relationship under any Federal or 11 State law. 12 SEC. 3. RULES APPLICABLE TO GROUP HEALTH PLANS ES- 13 TABLISHED AND MAINTAINED BY A GROUP 14 OR ASSOCIATION OF EMPLOYERS. 15 Part 7 of subtitle B of title I of the Employee Retire- 16 ment Income Security Act of 1974 (29 U.S.C. 1181, et seq.) 17 is amended by adding at the end the following: 18 ‘‘SEC. 736. RULES APPLICABLE TO GROUP HEALTH PLANS 19 ESTABLISHED AND MAINTAINED BY A GROUP 20 OR ASSOCIATION OF EMPLOYERS. 21 ‘‘(a) PREMIUM RATES FOR A GROUP OR ASSOCIATION 22 OF EMPLOYERS.— 23 ‘‘(1)(A) In the case of a group health plan estab- 24 lished and maintained by a group or association of 25 VerDate Sep 11 2014 23:59 Jun 14, 2023 Jkt 039200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6203 E:\BILLS\H2868.RH H2868 pbinns on DSKJLVW7X2PROD with $$_JOB 9 •HR 2868 RH employers described in section 3(5)(B), such plan 1 may— 2 ‘‘(i) establish base premium rates formed on 3 an actuarially sound, modified community rat- 4 ing methodology that considers the pooling of all 5 plan participant claims; and 6 ‘‘(ii) utilize the specific risk profile of each 7 employer member of such group or association to 8 determine contribution rates for each such em- 9 ployer member’s share of a premium by actuari- 10 ally adjusting above or below the established base 11 premium rates. 12 ‘‘(B) For purposes of paragraph (1), the term 13 ‘employer member’ means— 14 ‘‘(i) an employer who is a member of such 15 group or association of employers and employs 16 at least 1 common law employee; or 17 ‘‘(ii) a group made up solely of self-em- 18 ployed individuals, within which all of the self- 19 employed individual members of such group or 20 association are aggregated together as a single 21 employer member group, provided the group in- 22 cludes at least 20 self-employed individual mem- 23 bers. 24 VerDate Sep 11 2014 23:59 Jun 14, 2023 Jkt 039200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6203 E:\BILLS\H2868.RH H2868 pbinns on DSKJLVW7X2PROD with $$_JOB 10 •HR 2868 RH ‘‘(2) In the event a group or association is made 1 up solely of self-employed individuals (and no em- 2 ployers with at least 1 common law employee are 3 members of such group or association), the group 4 health plan established by such group or association 5 shall— 6 ‘‘(A) treat all self-employed individuals who 7 are members of such group or association as a 8 single risk pool; 9 ‘‘(B) pool all plan participant claims; and 10 ‘‘(C) charge each plan participant the same 11 premium rate. 12 ‘‘(b) DISCRIMINATION AND PRE-EXISTING CONDITION 13 PROTECTIONS.—A group health plan established and main- 14 tained by a group or association of employers described in 15 section 3(5)(B) shall be prohibited from— 16 ‘‘(1) establishing any rule for eligibility (includ- 17 ing continued eligibility) of any individual (includ- 18 ing an employee of an employer member or a self-em- 19 ployed individual, or a dependent of such employee or 20 self-employed individual) to enroll for benefits under 21 the terms of the plan that discriminates based on any 22 health status-related factor that relates to such indi- 23 vidual (consistent with the rules under section 24 702(a)(1)); 25 VerDate Sep 11 2014 23:59 Jun 14, 2023 Jkt 039200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6203 E:\BILLS\H2868.RH H2868 pbinns on DSKJLVW7X2PROD with $$_JOB 11 •HR 2868 RH ‘‘(2) requiring an individual (including an em- 1 ployee of an employer member or a self-employed in- 2 dividual, or a dependent of such employee or self-em- 3 ployed individual), as a condition of enrollment or 4 continued enrollment under the plan, to pay a pre- 5 mium or contribution that is greater than the pre- 6 mium or contribution for a similarly situated indi- 7 vidual enrolled in the plan based on any health sta- 8 tus-related factor that relates to such individual (con- 9 sistent with the rules under section 702(b)(1)); and 10 ‘‘(3) denying coverage under such plan on the 11 basis of a pre-existing condition (consistent with the 12 rules under section 2704 of the Public Health Service 13 Act).’’. 14 SEC. 4. RULE OF CONSTRUCTION. 15 Nothing in this Act shall be construed to exempt a 16 group health plan which is an employee welfare benefit plan 17 offered through a group or association of employers from 18 the requirements of part 7 of subtitle B of title I of the 19 Employee Retirement Income Security Act of 1974 (29 20 U.S.C. 1181 et. seq.), including the provisions of part A 21 of title XXVII of the Public Health Service Act as incor- 22 porated by reference into this Act through section 715. 23 VerDate Sep 11 2014 23:59 Jun 14, 2023 Jkt 039200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6203 E:\BILLS\H2868.RH H2868 pbinns on DSKJLVW7X2PROD with $$_JOB Union Calendar No. 87 118TH CONGRESS 1ST SESSION H. R. 2868 [Report No. 118–112] A BILL To amend the Employee Retirement Income Secu- rity Act of 1974 to clarify the treatment of cer- tain association health plans as employers, and for other purposes. JUNE 14, 2023 Reported with an amendment, committed to the Com- mittee of the Whole House on the State of the Union, and ordered to be printed VerDate Sep 11 2014 23:59 Jun 14, 2023 Jkt 039200 PO 00000 Frm 00012 Fmt 6651 Sfmt 6651 E:\BILLS\H2868.RH H2868 pbinns on DSKJLVW7X2PROD with $$_JOB