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.