Sec. 101. Association health plans
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Section 3(5) of the Employee Retirement Income Security Act of 1974 ( 29 U.S.C. 1002(5) ) is amended by inserting after capacity the following: (including, for the purpose of establishing or maintaining a group health plan, a group or association of employers that satisfies the requirements of section 736(a)) . Part 7 of subtitle B of title I of the Employee Retirement Income Security Act of 1974 ( 29 U.S.C. 1181 , et seq.) is amended by adding at the end the following: A group or association of employers may maintain a group health plan, regardless of whether the employers composing such group or association are in the same industry, trade, or profession, if such group or association satisfies the following requirements:
The group or association of employers— shall— have been formed and maintained in good faith for purposes other than providing health insurance coverage through a group health plan; establish a governing board or another indicator of formality as described in paragraph (2); and have existed for at least 2 years prior to offering a group health plan to the employees of such group or association; and make health insurance coverage under the group health plan offered by such group or association available— to at least 51 employees; and to all employees of the employer members, and any dependents of such employees; may only provide health insurance coverage through the group health plan of the group or association— to an employee of an employer member of the group or association or a dependent of such an employee; or as necessary to comply with part 6; may include a health insurance issuer as an employer member, except that the group or association may not— be a health insurance issuer; or be controlled or owned by a health insurance issuer (or a subsidiary or affiliate of a health insurance issuer). may not condition the membership of an employer in the group or association on any health status-related factor (as described in section 702(a)(1)) relating to any employee or dependent of any employee of any employer member.
The group or association shall have— a formal organizational structure with a governing board and by-laws; or another structure or indicator of formality. Both structures described in subclauses
(I)and
(II)of clause
(i)shall comply with the requirements described in subparagraph (B). The functions and activities of the group or association shall be controlled by the employer members in substance and in fact. The control described in clause
(i)shall be satisfied so long as at least 75 percent of the positions on the board or other formal organizational structure are held by employer members. Each position of the governing board or other formal organizational structure shall be subject to scheduled elections, as determined by the group or association, and each employer-member shall be able to cast only one vote in each such election. The group health plan shall be controlled in substance and in fact by employer members participating in the group health plan. A plan fiduciary shall verify, on a regular basis and pursuant to reasonable monitoring procedures as established by the plan fiduciary, whether an individual is a self-employed individual if such individual (or a beneficiary thereof) participates in the group health plan on the basis that such individual is a self-employed individual. Subject to subclause
(II)and except as required under part 6, in the case that the plan fiduciary determines that an individual who participates in the group health plan no longer meets the requirements under a self-employed individual during a plan year, the group health plan shall not make health insurance coverage available to such individual for any plan year following the plan year in which such determination was made. If, after the plan fiduciary determines that an individual described in clause
(i)is not a self-employed individual, the individual furnishes to the plan fiduciary evidence proving that such individual is a self-employed individual, such individual shall be eligible to participate in the group health plan. A group health plan established and maintained by the group or association of employers under this section may not— establish any rule for eligibility (including continued eligibility) of any individual (including an employee of an employer member or a self-employed individual, or a dependent of such employee or self-employed individual) to enroll for benefits under the terms of the plan that discriminates based on any health status-related factor that relates to such individual (consistent with the rules under section 702(a)(1)); require an individual (including an employee of an employer member or a self-employed individual, or a dependent of such employee or self-employed individual), as a condition of enrollment or continued enrollment under the plan, to pay a premium or contribution that is greater than the premium or contribution for a similarly situated individual enrolled in the plan based on any health status-related factor that relates to such individual (consistent with the rules under section 702(b)(1)); and deny coverage under such plan on the basis of a pre-existing condition (consistent with the rules under section 2704 of the Public Health Service Act). A group health plan established and maintained by a group or association of employers that meets that requirements of this section may, to the extent not prohibited under State law— establish base premium rates formed on an actuarially sound, modified community rating methodology that considers the pooling of all plan participant claims; and utilize the specific risk profile of each employer member of such group or association to determine contribution rates for each such employer member’s share of a premium by actuarially adjusting the established base premium rates. In the case that a group or association is composed only of self-employed individuals, the group health plan established by such group or association shall— treat all such self-employed individuals as a single risk pool; pool all plan participant claims; and charge each plan participant the same premium rate. For purposes of this section, an individual who is a self-employed individual shall be treated as— an employer who may be a member of a group or association of employers; an employee who may participate in a group health plan established and maintained by such group or association; and a participant of the group health plan in which the individual participates, subject to the eligibility determination and monitoring requirements set forth in subsection (a)(2)(C)(i). The provision of health insurance coverage by a group or association of employers may not be construed as evidence for establishing an employer or joint employer relationship under any Federal or State law. Nothing in this section shall be construed to exempt a group health plan (as defined in section 733(a)(1)) offered through a group or association of employers from the requirements of this part or from the provisions of part A of title XXVII of the Public Health Service Act as incorporated by reference into this Act through section 715. Nothing in this section may be construed to limit or otherwise affect the ability of a group or association of employers from establishing a single plan multiple employer welfare arrangement as specified in any prior or future guidance issued by the Secretary of Labor that provides alternative pathways to qualifying as a group or association of employer for purposes of section 3(5). In this section— The term employer member means— an employer who is a member of such group or association of employers and employs at least 1 common law employee; or a group made up solely of self-employed individuals, within which all of the self-employed individual members of such group or association are aggregated together as a single employer member group, provided that such group includes at least 20 self-employed individual members. The term self-employed individual means an individual who— does not have any common law employees; has a bona fide ownership right in a trade or business, regardless of whether such trade or business is incorporated or unincorporated; earns a wage (as defined in section 3121(a) of the Internal Revenue Code of 1986) or self-employment income (as defined in section 1402(b) of such Code) from such trade or business; and works at least 10 hours a week, or 40 hours per month, providing personal services to such trade or business. . The table of contents is amended by inserting after the item relating to section 734 the following: 735. Standardized reporting format. 736. Rules applicable to group health plans established and maintained by a group or association of employers. .
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