SIIA State Legislative/Regulatory Update Report

Self-Insurance Institute of America, Inc.

Exclusive Reporting for the Week of March 31, 2014

March 31, 2014 — This is your weekly update of state legislative/regulatory developments affecting companies involved in the self-insurance/alternative risk transfer marketplace. Should you have any questions on information provided in these reports and/or would like to alert SIIA to new state legislative/regulatory activity (health care, workers’ compensation and/or captive insurance matters) we may have missed, please contact Adam Brackemyre, Director of State Government Relations directly at 202/463-8161, or via e-mail at abrackemyre@siia.org.

NAIC Meeting- Stop Loss White Paper
The National Association of Insurance Commissioners (NAIC) met this weekend in Orlando. While the ERISA B Working Group is reportedly making progress on a first draft of its stop-loss white paper, the release date is behind schedule.

At the meeting, Chairwoman Christina Goe stated that once the paper is ready to be released, probably in early May, the Working Group will have two or three conference calls to discuss the paper and receive comments from the public. At this point, final approval could happen at the August NAIC meeting, assuming regulators do not get sidetracked with further ACA-related developments.

SIIA will continue to monitor the situation and anticipates providing comments on the report when it is released.

Connecticut – New Assessment Update
This past week, the Connecticut Joint Appropriations Committee released an updated budget, modified SB 21, retaining a new carrier assessment.

As noted in a previous update, Connecticut was one of 19 states to receive a federal State Innovation Model (SIM) grant. Many of these states, including Connecticut, propose to make health care delivery more coordinated, efficient and change care reimbursement methodologies for state-managed programs and state-regulated insurance carriers.

The governor’s budget contained a new assessment on fully and self-insured health plans to fund nine positions to implement the SIM grant.

SIIA testified against the assessment earlier this month, noting that it would likely be pre-empted by ERISA with regard to self-insured group health plans. SIIA will continue to work with affected Connecticut entities, including SIIA members and the business community, to fight this proposed assessment.

New York- Tax Treatment of Captive Insurance Companies
The final New York State budget protects the current tax treatment of captive insurance.

This weekend, the intense lobbying and grassroots efforts paid dividends, as the Assembly, Senate and governor’s office agreed to retain the current state tax treatment of captive insurance.

Thank you to those of you who contacted your Assembly Members and Senators to request that this problem be fixed.

Illinois Workers Compensation Pooling Legislation
Illinois SB 1873 has not advanced from the Assignments Committee and will no longer be considered.

The legislation would have increased solvency standards for self-funded workers compensation pools, standards that would have been challenging for some pools to meet.

SIIA will be watching for similar legislative language to appear in legislation that did pass committee by statutory deadline.

Washington, D.C.- Regulatory Comments Filed
SIIA filed comments in response to the recent Exchange assessment proposal.

In general, SIIA’s requested that the proposed regulations be clarified to explicitly exclude self-insured plans from the assessment, as this would be consistent with District law. Industry sources, including some SIIA members, are concerned that the exchange may attempt insurance outside of its scope of statutory authority.

SIIA will be providing updates and take additional action as necessary.

SIIA Legislative/Regulatory Conference
If you have not already done so, make plans to attend SIIA’s Legislative/Regulatory Conference scheduled for April 23-24, 2014 in Washington, DC. Conference details, including registration forms, can be accessed on-line at www.siia.org, or by calling 800/851-7789