Relating to eligibility to establish a multiple employer welfare arrangement.
The modifications brought about by SB 2304 align more closely with the requirements set forth by the federal government and aim to create a clearer framework for MEWAs in Texas. The bill allows for greater participation by working owners of trades or businesses with no employees, enabling them to benefit from the organizational health insurance structures. However, the law explicitly states that these new guidelines will only apply to applications made after January 1, 2020, ensuring that existing applications are governed by the previously established laws, thus providing a transitional phase for compliance.
Senate Bill 2304 addresses the eligibility criteria for establishing a multiple employer welfare arrangement (MEWA) in Texas, amending specific sections of the Insurance Code. The bill stipulates that employers wishing to participate in a MEWA must belong to an association or group of at least five businesses within the same trade or industry. This includes those that provide support or services to similar businesses. The provisions are designed to ensure that members of the arrangement have a direct industry connection, thus establishing a commonality that is beneficial for employee health benefit plans.
The sentiment surrounding SB 2304 appears to be largely supportive among business groups and legislators who advocate for increased flexibility in health benefit options. Proponents argue that the bill empowers smaller businesses, enabling them to leverage collective bargaining power, which can lead to better health insurance rates for their employees. Conversely, there are some concerns from critics who worry about the adequacy of protections under such arrangements and whether the new provisions will truly benefit the employees of these smaller entities.
Notable points of contention surrounding SB 2304 include the balance between facilitating business growth and ensuring adequate consumer protections within the insurance sector. As MEWAs can potentially lower costs, questions arise regarding the quality and comprehensiveness of health coverage provided. The bill's approach to defining an employer's eligibility, particularly allowing working owners to qualify as both employers and employees, has been met with scrutiny regarding its implications for both regulatory oversight and employee rights.