North Dakota’s 2019 legislative session began today, January 3, and a bill to create a reinsurance program via an ACA § 1332 Waiver has been introduced. Under the language of House Bill 1106, a self-funded, single employer plan is not included in the definition of “health benefit plan” (health benefit plans would be required to participate in the reinsurance association created under the bill). However, digging deeper into the funding sources for this proposal highlights an issue for ERIC members: an assessment on “insurers” operating in the state. The bill’s definition of insurer includes third-party administrators (TPAs). This is similar to last year’s waiver proposal in Louisiana that ERIC successfully prevented from passing.
While ERISA plans are exempt from association membership, targeting TPAs will indirectly have the same effect that ERISA was intended to prevent. Congress created ERISA to keep employee benefit plans strong and to ensure that they are administered for the exclusive purpose of providing benefits to participants and their beneficiaries. Those covered by employer-sponsored insurance would receive no benefit from the proposed reinsurance program and would likely see their premiums increase as a result of an assessment on TPAs. An earlier report estimates the assessment in 2020 will be 1-1.5% of TPA premium equivalent (claim paid plus administrative fees).
The bill was introduced by the House Industry, Business and Labor Committee, and ERIC will be weighing in on this proposal when the opportunity arises. If your company has a significant presence in North Dakota, please reach out to your state government relations team and let them know about this issue. We are happy to connect with them directly to strategize on the best path forward.
Article by Adam Greathouse, Health Care Policy Senior Associate