| 1 | 1 | | 87R10919 MWC-F |
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| 2 | 2 | | By: Powell S.B. No. 1861 |
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| 3 | 3 | | |
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| 4 | 4 | | |
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| 5 | 5 | | A BILL TO BE ENTITLED |
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| 6 | 6 | | AN ACT |
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| 7 | 7 | | relating to the eligibility of certain groups or associations that |
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| 8 | 8 | | include self-employed individuals to participate in a multiple |
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| 9 | 9 | | employer welfare arrangement. |
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| 10 | 10 | | BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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| 11 | 11 | | SECTION 1. Section 846.201, Insurance Code, is amended by |
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| 12 | 12 | | amending Subsection (b) and adding Subsection (c) to read as |
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| 13 | 13 | | follows: |
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| 14 | 14 | | (b) Except as otherwise limited by the Employee Retirement |
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| 15 | 15 | | Income Security Act of 1974 (29 U.S.C. Section 1001 et seq.), a |
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| 16 | 16 | | multiple employer welfare arrangement may only provide benefits to: |
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| 17 | 17 | | (1) active or retired owners, officers, directors, or |
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| 18 | 18 | | employees of or partners in: |
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| 19 | 19 | | (A) participating employers; or |
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| 20 | 20 | | (B) bona fide groups or associations of |
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| 21 | 21 | | employers; and |
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| 22 | 22 | | (2) the beneficiaries of a person described by |
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| 23 | 23 | | Subdivision (1). |
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| 24 | 24 | | (c) A group or association is considered a bona fide group |
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| 25 | 25 | | or association of employers for the purpose of this section if: |
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| 26 | 26 | | (1) the group or association has at least one |
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| 27 | 27 | | substantial business purpose unrelated to offering and providing |
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| 28 | 28 | | health coverage or other employee benefits to its employer-members |
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| 29 | 29 | | and their employees, including the purpose of promoting the common |
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| 30 | 30 | | business interests of its members or promoting the economic |
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| 31 | 31 | | interests of its members in a trade or employer opportunity, |
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| 32 | 32 | | regardless of whether the business purpose is a for-profit |
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| 33 | 33 | | activity; |
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| 34 | 34 | | (2) the group or association would be a viable entity |
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| 35 | 35 | | in the absence of sponsoring an employee benefit plan; |
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| 36 | 36 | | (3) each employer-member of the group or association |
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| 37 | 37 | | participating in the group health plan is a person acting directly |
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| 38 | 38 | | as an employer of at least one employee who is covered under the |
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| 39 | 39 | | plan, which may include a sole proprietor or principal of a business |
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| 40 | 40 | | entity and regardless of whether any other person is employed by the |
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| 41 | 41 | | sole proprietor or principal of a business entity; |
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| 42 | 42 | | (4) the group or association has a formal |
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| 43 | 43 | | organizational structure with a governing body and by-laws or other |
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| 44 | 44 | | similar indications of formality; |
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| 45 | 45 | | (5) the functions and activities of the group or |
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| 46 | 46 | | association are controlled by its employer-members, and the group's |
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| 47 | 47 | | or association's employer-members that participate in the group |
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| 48 | 48 | | health plan control the plan; and |
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| 49 | 49 | | (6) the employer-members have a commonality of |
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| 50 | 50 | | interest because the members: |
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| 51 | 51 | | (A) are in the same trade, industry, line or |
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| 52 | 52 | | business, or profession; or |
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| 53 | 53 | | (B) have a principal place of business in the |
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| 54 | 54 | | same region that does not extend beyond the boundaries of: |
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| 55 | 55 | | (i) a state; or |
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| 56 | 56 | | (ii) a metropolitan area regardless of |
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| 57 | 57 | | whether the metropolitan area includes more than one state. |
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| 58 | 58 | | SECTION 2. This Act takes effect September 1, 2021. |
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