Insurance Companies, Agents, Brokers, Policies

Plain English Breakdown

The candidate explanation included terms like 'self-insurer' that are not directly related to the bill's content and were removed.

Insurance Rules for Foreign Companies

This bill allows certain foreign companies managing health benefits for banks and their employees to be treated as if they were based in Tennessee under specific conditions.

What This Bill Does

• Allows a foreign multiple employer welfare arrangement (MEWA) that meets specified criteria to be considered a domestic MEWA.
• Requires the foreign MEWA to have proper licensing from a nearby state, limited enrollment of Tennessee residents, and adequate oversight by that state's regulators.
• Gives the commissioner of commerce and insurance the power to waive some existing insurance rules for these companies if they are well-regulated in their home state.
• Clarifies that health benefit pools created under this law must follow Tennessee’s tax, filing, and approval laws.

Who It Names or Affects

• Foreign multiple employer welfare arrangements managing health benefits for banks and their employees.
• The commissioner of commerce and insurance who oversees these companies in Tennessee.

Terms To Know

Multiple Employer Welfare Arrangement

A plan that provides health insurance coverage to workers from multiple different employers.

Limits and Unknowns

• The bill does not specify how the commissioner will decide which companies qualify for special treatment.
• It is unclear what specific benefits this change might bring to Tennessee residents.
• The bill only applies to foreign companies managing health benefits for banks and their employees.

Official Summary Text

POOLING OF LIABILITIES
TO SELF-INSURERS

Present law authorizes the following pooling of liabilities:



If certain criteria is met, t
wo or more member employers of the same trade or professional organization with at least 500 covered lives may enter into an agreement to pool their liabilities for the purpose of qualifying as self-insurers.



If certain criteria is met,
10 or more employers of the same nonprofit business coalition for health, organized in this state, may enter into an agreement with the coalition to pool their liabilities for the purpose of qualifying as self-insurers.



If certain criteria is met, t
wo or more member employers with at least 500

covered lives may enter into an agreement to pool their liabilities for the purpose of qualifying as self-insurers if the employers are members of the same association that has a principal office within this state.



If certain criteria is met,

two
or more member employers with at least 500 covered lives may enter into an agreement to pool their liabilities for the purpose of qualifying as self-insurers if the employers are members of the same association that has a principal office within a municipality with a boundary that lies at least partially within this state.

This bill authorizes, for purposes of pooling liabilities, a
foreign multiple employer welfare arrangement
to be
deemed a domestic multiple employer welfare arrangement if the foreign multiple employer welfare arrangement
meets all of the following criteria
:



It i
s comprised only of banks together with their plan-sponsoring organization, and their respective employees
.



It i
s duly licensed as a multiple employer welfare arrangement by the regulatory agency having jurisdiction over the regulation of insurance in a state physically contiguous to this state
.



It h
as no more than 2,500 residents of this state who are employees of its member banks enrolled in or receiving health, sickness, and accident benefits as insureds, members, enrollees, or subscribers of the multiple employer welfare arrangement
.



It i
s subject to adequate regulatory oversight by the contiguous domiciliary state, including, but not limited to, solvency examination authority and actuarially sound reserve-adequacy requirements, as determined in the commissioner's sole discretion
.



It a
pplies for and receives a certificate of authority from the commissioner to operate as a foreign multiple employer welfare arrangement.

This bill authorizes

t
he commissioner
of commerce and insurance
to
, in the commissioner's sole discretion, waive any portion of
exist
ing insurance law relative to accident and sickness insurance
, and any portion of
existing insurance law relative to policies and policyholders
, for a qualifying multiple employer welfare arrangement upon a determination that the multiple employer welfare
arrangement is subject to reasonable and adequate oversight by the regulatory agency having jurisdiction over the regulation of insurance in the multiple employer welfare arrangement's domicile.

APPLICATION OF TAXATON, FILING AND APPROVAL, AND LAWS

Pres
ent law provides that

p
ools
so
created
as described above
are subject to taxation, filing and approval, and laws for protection of policyholders
as provided in the insurance laws of this state
.
This bill clarifies that pools deemed domestic are also subje
ct to such
taxation, filing and approval, and laws for protection of policyholders
.

DEPARTMENT RULES

Present law authorizes the
commissioner of commerce and insurance to promulgate rules as deemed necessary to provide for the solvency, administration, e
xamination, and enforcement of the pooling agreements.

However, such rules must not prohibit or deter any association lawfully formed under the laws of this state or any other state from offering health insurance coverage to its members within this state
if the health insurance coverage complies with federal law.
This bill clarifies that
such rules must not prohibit or deter
health insurance coverage
through a multiple employer welfare arrangement
.

Current Bill Text

SENATE BILL 286
By Bailey

HOUSE BILL 329
By Martin B

HB0329
002028
- 1 -

AN ACT to amend Tennessee Code Annotated, Title 56,
Chapter 26, relative to multiple employer welfare
arrangements.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF TENNESSEE:
SECTION 1. Tennessee Code Annotated, Section 56-26-204(a), is amended by adding
the following as a new subdivision:
(5)
(A) As used in this subdivision (a)(5):
(i) "Bank":
(a) Means an entity chartered pursuant to the laws of this
state, the laws of a contiguous state, or the laws of the United
States, or in the process of organizing to seek a charter, and
authorized, or to be authorized, to conduct business as a savings
and loan, savings bank, trust company, commercial bank, or other
institution, and which is a member or affiliate member of a trade or
professional organization organized to provide advocacy,
leadership, and support for these entities; provided, that the
entity's participation is authorized under Internal Revenue Code §
501(c)(9) (26 U.S.C. § 501(c)(9)); and
(b) Includes the entity's parent, affiliate, or subsidiary,
which is under common control within the meaning of Internal
Revenue Code § 414 (26 U.S.C. § 414);

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(ii) "Commissioner" means the commissioner of commerce and
insurance;
(iii) "Multiple employer welfare arrangement" has the same
meaning as defined in 29 U.S.C. § 1002(40); and
(iv) "Plan-sponsoring organization" means an association that:
(a) Sponsors a multiple employer welfare arrangement
comprised only of banks;
(b) Has been actively in existence for at least five (5)
years;
(c) Has at least one (1) substantial business purpose
unrelated to offering and providing health insurance coverage or
other employee benefits to its employer members and their
employees; provided, that offering and providing such coverage or
benefits may serve as the association's primary purpose;
(d) Does not condition membership in the association on
any health status-related factor relating to an individual, including
an employee of an employer or a dependent of an employee;
(e) Makes health insurance coverage offered through the
association available to all members regardless of any health
status-related factor relating to the members or individuals eligible
for coverage through a member; and
(f) Does not make health insurance coverage offered
through the association available other than in connection with a
member of the association.

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(B) A foreign multiple employer welfare arrangement is deemed a
domestic multiple employer welfare arrangement if the foreign multiple employer
welfare arrangement:
(i) Is comprised only of banks together with their plan-sponsoring
organization, and their respective employees;
(ii) Is duly licensed as a multiple employer welfare arrangement
by the regulatory agency having jurisdiction over the regulation of
insurance in a state physically contiguous to this state;
(iii) Has no more than two thousand five hundred (2,500)
residents of this state who are employees of its member banks enrolled in
or receiving health, sickness, and accident benefits as insureds,
members, enrollees, or subscribers of the multiple employer welfare
arrangement;
(iv) Is subject to adequate regulatory oversight by the contiguous
domiciliary state, including, but not limited to, solvency examination
authority and actuarially sound reserve-adequacy requirements, as
determined in the commissioner's sole discretion; and
(v) Applies for and receives a certificate of authority from the
commissioner to operate as a foreign multiple employer welfare
arrangement.
(C) The commissioner may, in the commissioner's sole discretion, waive
any portion of this chapter, and any portion of chapter 7 of this title, for a
qualifying multiple employer welfare arrangement upon a determination that the
multiple employer welfare arrangement is subject to reasonable and adequate

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oversight by the regulatory agency having jurisdiction over the regulation of
insurance in the multiple employer welfare arrangement's domicile.
SECTION 2. Tennessee Code Annotated, Section 56-26-204, is amended by deleting
subsections (b) and (c) and substituting:
(b) The commissioner may promulgate rules in accordance with the Uniform
Administrative Procedures Act, compiled in title 4, chapter 5, as deemed necessary to
provide for the solvency, administration, examination, and enforcement of the pooling
agreements. However, the rules must not prohibit or deter any association lawfully
formed under the laws of this state or another state from offering health insurance
coverage to its members within this state, including through a multiple employer welfare
arrangement, if the health insurance coverage complies with federal law. To the extent
deemed necessary by the commissioner, each employer member of the approved group
must be classified as a self-insurer as otherwise provided in this chapter.
(c) A pool created or deemed domestic under this section is subject to taxation
under chapter 4 of this title, filing and approval under this chapter, and laws for
protection of policyholders under chapter 7 of this title.
SECTION 3. This act takes effect upon becoming a law, the public welfare requiring it.