HBA-MPM H.B. 3630 77(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 3630 By: Thompson Insurance 6/29/2001 Enrolled BACKGROUND AND PURPOSE A multiple employer welfare arrangement (MEWA) is a not for profit arrangement that allows two or more employers to self-fund their employee benefit plans. Previously, MEWAs were assessed charges for the assigned risk pool. Unlike most insurance companies, a MEWA does not set contributions to make a profit and so the risk pool assessments must be passed directly to employers, thereby making the cost of providing coverage to employees higher. If MEWAs did not have to contribute toward these assessments, the cost of providing coverage to employees might decrease. At the time of the 77th Legislature, MEWAs contributed less than 0.2 percent of the assigned risk pool's assessments, so the effect of the loss of the contributions from MEWAs on the risk pool would be negligible. Also, there was some concern that the assessment is actually not allowed because MEWAs are subject to the federal Employee Retirement Income Security Act of 1974. House Bill 3630 removes MEWAs from the list of insurers assessed for the risk pool. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that this bill does not expressly delegate any additional rulemaking authority to a state officer, department, agency, or institution. ANALYSIS House Bill 3630 removes a multiple employer welfare arrangement as it applies to entities that provide health insurance from the definition of "insurer" who is assessed by the board of directors of the Texas Health Insurance Risk Pool for the plan's organizational and operating expenses. EFFECTIVE DATE September 1, 2001.