AB 920

This bill allows the establishment of employer groups to jointly provide health

care benefits on a self-funded basis to the employers' eligible employees and their

dependents under a health care benefit arrangement. Two or more employers that

are members of the same chamber of commerce or industry-based association may

form an employer group. Employer groups that provide evidence to the

commissioner of insurance that they have formed and are able to comply with the

requirements in the bill qualify to participate in the self-funded health benefits

project.

Each employer group in the project must, among other requirements, do all of

the following: determine all matters necessary for administration and operation of

the employee health care benefit arrangement; determine, based on an actuary's

recommendations, the amount that each employer must contribute for the health

care benefit arrangement, adminstrative expenses, and excess or stop-loss coverage;

establish a minimum participation period of no less than three years for an employer

to participate unless the employer meets special circumstances established by the

employer group; and report annually to the commissioner of insurance on the

stability of the group and its finances. The employer group may specify minimum

participation requirements that employers must meet to participate, but must, with

certain exceptions, allow any employer that is a member of the same chamber of

commerce or industry-based association and agrees to comply with those

requirements to participate. If an employer does not pay the required contribution,

the employer group must terminate the participation of the employer. If an employer

terminates participation in an employer group voluntarily or involuntarily, the

employer is responsible for contribution amounts required during the employer's

participation and the employer's proportionate share of the cost of claims payable

before the termination.

Each employer group in the project must require each of its participating

employers to offer a similar level of health care benefits to all eligible employees and

dependents.

Each employer group in the program is required to pay no more than $50,000

in benefits for each covered individual in a calendar year, unless an independent

actuary confirms the employer group is financially capable of paying more. The

employer group is required to obtain excess or stop-loss coverage in an amount

sufficient to pay the excess amount of claims.

The bill specifies that the employer group is not considered an insurer, and the

health care benefit arrangement is not considered an insurance contract, for any

purpose. The insurance statutes do not apply to an employer group or a health care

benefit arrangement.