HBA-MPM H.B. 3630 77(R)    BILL ANALYSIS


Office of House Bill AnalysisH.B. 3630
By: Thompson
Insurance
4/22/2001
Introduced



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.  Currently, MEWAs are 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. Currently, MEWAs
contribute less than 0.2 percent of the assigned risk pool's assessments,
so the effect of the loss of MEWAs' contributions on the risk pool would be
negligible.   Also, there is 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.