LEGISLATIVE SERVICES AGENCY
OFFICE OF FISCAL AND MANAGEMENT ANALYSIS
200 W. Washington St., Suite 301
Indianapolis, IN 46204
(317) 233-0696
iga.in.gov
FISCAL IMPACT STATEMENT
LS 7013 NOTE PREPARED: Jan 4, 2022
BILL NUMBER: HB 1296 BILL AMENDED:
SUBJECT: Multiple Employer Welfare Arrangements.
FIRST AUTHOR: Rep. Carbaugh BILL STATUS: As Introduced
FIRST SPONSOR:
FUNDS AFFECTED:XGENERAL IMPACT: State & Local
XDEDICATED
FEDERAL
Summary of Legislation: Claims Data Access: The bill amends the law concerning multiple employer
welfare arrangements (MEWA) to require a MEWA to provide each participating employer access to claims
data that is specific to that employer.
Governmental Entity Withdrawal: It provides that when a governmental entity withdraws from a MEWA,
the MEWA shall distribute to the withdrawing governmental entity a share of the MEWA's reserve that is
proportional to the ratio between the withdrawing governmental entity's contribution to the reserve and the
contributions of all participating employers. It also requires that this distribution be made within a one year
period but provides that the distribution shall not occur until all claims of the employees of the withdrawing
governmental entity have been paid.
Unfair and Deceptive Acts or Practices: The bill makes the violation of any requirement of the MEWA law
an unfair method of competition or unfair or deceptive act or practice.
Notice Effective Date: It provides that if a MEWA is established by governmental entities through an
interlocal cooperation agreement, the cancellation or termination of the interlocal cooperation agreement or
the MEWA or the termination or nonrenewal of a governmental entity's participation in the MEWA pursuant
to a notice given by a governmental entity must be effective not more than three months after the
governmental entity gives the notice.
Effective Date: July 1, 2022.
Explanation of State Expenditures: Unfair and Deceptive Acts or Practices: Violations of the laws
HB 1296 1 concerning MEWAs will be actionable by the Department of Insurance (DOI) as unfair and deceptive acts
and practices in the practice of insurance. The agency workload may increase to investigate and adjudicate
allegations to determine if an unfair or deceptive act has been committed. The bill allows the DOI to adopt
rules. Increases in DOI workload are within the routine administrative function of the agency and expected
to be accomplished within existing resource and funding levels. [The DOI is funded through a dedicated
agency fund.]
Explanation of State Revenues: Unfair and Deceptive Acts or Practices: The DOI may take administrative
actions concerning unfair and deceptive acts and practices that will impact revenue to the state General Fund
and the DOI’s agency fund. The penalty for engaging in an unfair and deceptive act is a civil penalty between
$25,000 and $50,000 for each act or violation. The revocation of a insurers license or certificate of authority
for knowingly engaged in an unfair or deceptive act would result in a reduction in fee revenue to the DOI
agency fund.
Explanation of Local Expenditures: The bill sets out the manner in which a governmental unit would
withdraw from a MEWA. The structure provided may remove issues that might otherwise be litigated as the
result of a dissolution. [There are 21 MEWAs, comprised mostly of school districts.]
Explanation of Local Revenues:
State Agencies Affected: Department of Insurance.
Local Agencies Affected: Units participating in MEWAs.
Information Sources: Claire Szpara, DOI.
Fiscal Analyst: Karen Rossen, 317-234-2106.
HB 1296 2