Health care coverage: multiple employer welfare arrangements.
The legislation mandates that such associations must annually file proof of compliance with regulatory requirements to the Department of Managed Health Care. This ensures transparency and regulatory oversight over the health plans provided to small businesses, aiming to stabilize and enhance access to health insurance for small group employers. Additionally, the bill instigates an analysis due by June 30, 2028, to assess the effects of MEWAs on the small employer health insurance market, providing necessary data to guide future health policy decisions.
Assembly Bill No. 2434, enacted in California, pertains to health care coverage by allowing associations of employers to offer large group health care service plan contracts to small group employer members. This bill aligns with the federal Employee Retirement Income Security Act (ERISA) and expands upon existing laws regarding multiple employer welfare arrangements (MEWAs). Specifically, it sets forth requirements for associations to qualify for offering these health plans, which must be established before 1966 and include members from specific industries such as engineering, surveying, or design.
The sentiment surrounding AB 2434 appears to be generally supportive among associations and employers in the specified sectors, as it provides more opportunities for small groups to obtain health care coverage at potentially reduced costs through collective bargaining. However, there are concerns among some stakeholders about how the changes might affect the competitive landscape in the health insurance market. These concerns emphasize the importance of ensuring that the new arrangements do not inadvertently disadvantage smaller employers who opt not to participate in MEWAs.
Notably contentious points include the compliance and regulatory obligations imposed on associations wishing to offer these health care plans. Some critics argue that these requirements may introduce burdensome administrative processes for associations, particularly small ones. Furthermore, the bill includes provisions for repealing these rules effective January 1, 2030, which raises questions about the longevity and sustained impact of the legislation without further amendments or continuity assessments.