HOUSE BILL 329
By Martin B
SENATE BILL 286
By Bailey
SB0286
002028
- 1 -
AN ACT to amend Tennessee Code Annotated, Title 56,
Chapter 26, relative to multiple employer welfare
arrangements.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF TENNESSEE:
SECTION 1. Tennessee Code Annotated, Section 56-26-204(a), is amended by adding
the following as a new subdivision:
(5)
(A) As used in this subdivision (a)(5):
(i) "Bank":
(a) Means an entity chartered pursuant to the laws of this
state, the laws of a contiguous state, or the laws of the United
States, or in the process of organizing to seek a charter, and
authorized, or to be authorized, to conduct business as a savings
and loan, savings bank, trust company, commercial bank, or other
institution, and which is a member or affiliate member of a trade or
professional organization organized to provide advocacy,
leadership, and support for these entities; provided, that the
entity's participation is authorized under Internal Revenue Code §
501(c)(9) (26 U.S.C. § 501(c)(9)); and
(b) Includes the entity's parent, affiliate, or subsidiary,
which is under common control within the meaning of Internal
Revenue Code § 414 (26 U.S.C. § 414);
- 2 - 002028
(ii) "Commissioner" means the commissioner of commerce and
insurance;
(iii) "Multiple employer welfare arrangement" has the same
meaning as defined in 29 U.S.C. § 1002(40); and
(iv) "Plan-sponsoring organization" means an association that:
(a) Sponsors a multiple employer welfare arrangement
comprised only of banks;
(b) Has been actively in existence for at least five (5)
years;
(c) Has at least one (1) substantial business purpose
unrelated to offering and providing health insurance coverage or
other employee benefits to its employer members and their
employees; provided, that offering and providing such coverage or
benefits may serve as the association's primary purpose;
(d) Does not condition membership in the association on
any health status-related factor relating to an individual, including
an employee of an employer or a dependent of an employee;
(e) Makes health insurance coverage offered through the
association available to all members regardless of any health
status-related factor relating to the members or individuals eligible
for coverage through a member; and
(f) Does not make health insurance coverage offered
through the association available other than in connection with a
member of the association.
- 3 - 002028
(B) A foreign multiple employer welfare arrangement is deemed a
domestic multiple employer welfare arrangement if the foreign multiple employer
welfare arrangement:
(i) Is comprised only of banks together with their plan-sponsoring
organization, and their respective employees;
(ii) Is duly licensed as a multiple employer welfare arrangement
by the regulatory agency having jurisdiction over the regulation of
insurance in a state physically contiguous to this state;
(iii) Has no more than two thousand five hundred (2,500)
residents of this state who are employees of its member banks enrolled in
or receiving health, sickness, and accident benefits as insureds,
members, enrollees, or subscribers of the multiple employer welfare
arrangement;
(iv) Is subject to adequate regulatory oversight by the contiguous
domiciliary state, including, but not limited to, solvency examination
authority and actuarially sound reserve-adequacy requirements, as
determined in the commissioner's sole discretion; and
(v) Applies for and receives a certificate of authority from the
commissioner to operate as a foreign multiple employer welfare
arrangement.
(C) The commissioner may, in the commissioner's sole discretion, waive
any portion of this chapter, and any portion of chapter 7 of this title, for a
qualifying multiple employer welfare arrangement upon a determination that the
multiple employer welfare arrangement is subject to reasonable and adequate
- 4 - 002028
oversight by the regulatory agency having jurisdiction over the regulation of
insurance in the multiple employer welfare arrangement's domicile.
SECTION 2. Tennessee Code Annotated, Section 56-26-204, is amended by deleting
subsections (b) and (c) and substituting:
(b) The commissioner may promulgate rules in accordance with the Uniform
Administrative Procedures Act, compiled in title 4, chapter 5, as deemed necessary to
provide for the solvency, administration, examination, and enforcement of the pooling
agreements. However, the rules must not prohibit or deter any association lawfully
formed under the laws of this state or another state from offering health insurance
coverage to its members within this state, including through a multiple employer welfare
arrangement, if the health insurance coverage complies with federal law. To the extent
deemed necessary by the commissioner, each employer member of the approved group
must be classified as a self-insurer as otherwise provided in this chapter.
(c) A pool created or deemed domestic under this section is subject to taxation
under chapter 4 of this title, filing and approval under this chapter, and laws for
protection of policyholders under chapter 7 of this title.
SECTION 3. This act takes effect upon becoming a law, the public welfare requiring it.