(1)
Certificate of
registration. A person shall not establish or maintain a self-insured
employee welfare benefit plan that is a self-insured MEWA in this state unless
the MEWA obtains and maintains a certificate of registration pursuant to this
rule. Such certificate of registration is required for all MEWAs that elect to
offer self-insured employee welfare benefit plans to residents of this state
whether or not the MEWA is domiciled in the state.
(2)
Application for certificate of
registration.
a. A
person wishing to
obtain a certificate of registration as a self-insured
MEWA pursuant to this
chapter shall submit an application and a plan of operation to the
commissioner. This application and plan of operation shall include the
following:
(1) A business plan, including a
copy of all health coverage contracts or other instruments which the
self-insured MEWA applicant proposes to make with or sell to its employer
members or its association's or group's members, a copy of its health coverage
description and the printed matter to be used in the solicitation of employer
members or its association's or group's members to purchase the health
coverage.
(2) Copies of all
articles, bylaws, agreements, or other documents or instruments describing the
rights and obligations of employers, employees, and beneficiaries with respect
to the self-insured MEWA applicant.
(3) A current list of all members of the
employer group or association sponsoring the self-insured MEWA applicant, a
description of the relationship among the employers, a description of how the
relationship serves as the basis for the formation of the association or
employer group, and a description of how the employer group or association
complies with paragraphs 77.3(5) "a" and
77.3(5)"b," if applicable.
(4) A description of the activities of the
association or group of employers on behalf of its employer members or its
association's or group's members other than the sponsorship of the self-insured
MEWA applicant, to further demonstrate compliance with paragraph
77.3(5)"a," if applicable.
(5) Current financial statements of the
self-insured MEWA applicant that shall include, at a minimum, balance sheets,
an income statement, a cash flow statement and a detailed listing of
assets.
(6) An actuarial opinion
which is prepared, signed, and dated by a person who is a member of the
American Academy of Actuaries and which states that appropriate loss and loss
adjustment reserves have been established, that adequate premiums are being
charged, and that the association is operating in accordance with sound
actuarial principles and in conformance with this rule.
(7) A statement from an
authorized
representative of the self-insured
MEWA applicant that certifies all of the
following:
1. The self-insured MEWA applicant
shall be administered by an insurer authorized to do the business of insurance
in this state or by an authorized third-party administrator that holds a
current certificate of registration issued by the commissioner pursuant to Iowa
Code section
51021..
2. The self-insured MEWA applicant is
established by a trade, industry, or professional association of employers that
has a constitution or bylaws, is organized and maintained in good faith, and
meets all membership requirements set forth in subrule 77.3(5).
3. The association or group of employers
sponsoring the self-insured MEWA applicant is engaged in substantial activity
for its members other than sponsorship of an employee welfare benefit
plan.
4. The association is a
nonprofit entity organized or authorized to do business under applicable Iowa
law.
5. No insurance producers or
benefits consultants established, sponsored, administer, or serve as a trustee
or on the governing body of the self-insured MEWA applicant.
(8) A certificate from an
authorized representative of the self-insured
MEWA applicant that, to the best
of the
authorized representative's knowledge and belief, the self-insured
MEWA
applicant is in compliance with all applicable provisions of the
Employee
Retirement Income Security
Act of 1974 (
29 U.S.C. Section
1001 et seq.).
(9) A description of and evidence of a
mechanism, approved by the commissioner, to ensure that claims shall be paid in
the event an employer member of the self-insured MEWA applicant is unable to
comply with the self-insured MEWA applicant's contribution
requirements.
(10) A copy of the
most recent Form M-l filed by the self-insured MEWA applicant with the U.S.
Department of Labor, Pension and Welfare Benefits Administration.
(11) Biographical affidavits from all members
of the board of directors of the self-insured MEWA applicant. The affidavits
shall be prepared using the current template for biographical affidavits
prescribed by the National Association of Insurance Commissioners. This
requirement shall not apply to any MEWA registered with the state prior to
January 1, 2018.
(12) Any
additional information requested by the commissioner.
b. The commissioner shall examine the
application, the plan of operation, and any supporting documents submitted by
the applicant. The commissioner may conduct any investigation that the
commissioner may deem necessary and may examine under oath any persons
interested in or connected with the self-insured MEWA applicant.
c. Within a reasonable time, either the
commissioner shall issue to the self-insured MEWA applicant a certificate of
registration upon finding that the self-insured MEWA applicant has met all
requirements or the commissioner shall deny the application for a certificate
of registration and provide notice to the self-insured MEWA applicant setting
forth reasons for finding that the self-insured MEWA applicant does not meet
all the requirements. An unsuccessful applicant may file a new application for
a certificate of registration at any time.
(3)
Financial requirements.
a.
Surplus.
(1) Unless otherwise provided below or
pursuant to the discretion of the commissioner, each self-insured MEWA shall
deposit with an organization or trustee meeting the requirements of rule
191-324.
(508) cash, securities or any combination of these that is acceptable to the
commissioner in the amount set forth below. In addition to the requirements set
forth below, the commissioner may increase the amount required to be deposited
based on the commissioner's written determination that such an increase is
necessary to adequately secure any potential liability of the self-insured MEWA
to its employer members and enrollees, subject to Iowa Code chapter 17A
proceedings.
(2) The surplus
requirement for a self-insured
MEWA shall be the greater of:
1. $500,000; or
2. An amount equal to 10 percent of the
written premium as of the previous December 31.
b.
Reserves and stop-loss
coverage.
(1) A self-insured MEWA
shall have at all times aggregate excess stop-loss coverage providing the
self-insured MEWA with coverage with an attachment point which is not greater
than 120 percent of actuarially projected losses on a calendar-year
basis.
(2) A self-insured MEWA
shall establish and maintain specific stop-loss coverage providing the
self-insured MEWA with coverage with an attachment point which is not greater
than 5 percent of annual expected claims for purposes of this subrule and shall
provide for adjustments in the amount of that percentage as may be necessary to
carry out the purposes of this subrule as determined by sound actuarial
principles.
(3) A self-insured MEWA
shall establish and maintain appropriate loss and loss adjustment reserves
determined by sound actuarial principles.
(4) Premiums shall be set to fund at least
100 percent of the self-insured MEWA's actuarially projected losses plus all
other costs of the self-insured MEWA.
(5) All coverage obtained pursuant to
77.3(3)"b"(1) and 77.3(3)"b"(2) shall contain
a provision allowing for at least 90 days' notice to the commissioner upon
cancellation or nonrenewal of the contract.
(6) No contract or policy of per-occurrence
or aggregate excess insurance shall be recognized in considering the ability of
an applicant to fulfill its financial obligations under this subrule, unless
such contract or policy is issued by a
person that is:
1. Licensed to transact business in this
state; or
2. Authorized to do
business in Iowa as an accredited or certified reinsurer.
(4)
Filing
requirements. A self-insured
MEWA shall file the following reports
with the
commissioner:
a.
Annual
report. A self-insured MEWA shall annually, on or before the first day
of March, file a report which has been verified by at least two of its
principal officers and which covers the preceding calendar year. The report
shall be on the form designated by the commissioner. The report shall be
completed using statutory accounting practices and shall include information
required by the commissioner. The commissioner may request additional reports
and information from a self-insured MEWA as deemed necessary.
b.
Independent actuarial
report. A self-insured MEWA shall annually, on or before the first day
of March, file an independent actuarial opinion prepared in conformance with
this rule. The commissioner may conduct an independent actuarial review of a
self-insured MEWA in addition to the actuarial opinion required by this rule.
The cost of any actuarial review shall be paid by the self-insured
MEWA.
c.
Certificate of
compliance. A self-insured
MEWA shall annually, on or before the first
day of March, file a certificate of compliance, which shall be signed and dated
by the appropriate officer representing the self-insured
MEWA and shall certify
all of the following:
(1) That the plan meets
the requirements of this rule and the applicable provisions of Iowa statutes
and regulations.
(2) That an
independent actuarial opinion that attests to the adequacy of reserves, rates,
and the financial condition of the plan has been attached to the certificate of
compliance. The actuarial opinion must include, but is not limited to, a brief
commentary about the adequacy of the reserves, rates, and other financial
condition of the plan, a test of the prior year's claim reserve, a brief
description of how the reserves were calculated, and whether or not the plan is
able to cover all reasonably anticipated expenses. The actuarial opinion shall
be prepared, signed, and dated by a person who is a member of the American
Academy of Actuaries.
(3) That a
written complaint procedure has been implemented. The certificate of compliance
shall also list the number of complaints filed by participants under the
written complaint procedure, and the percentage of participants filing written
complaints in the prior calendar year.
(4) That the self-insured MEWA has contracted
with an insurer authorized to do the business of insurance in this state or
with a third-party administrator that holds a current certificate of
registration issued by the commissioner pursuant to Iowa Code section
510.21.
d.
Quarterly updates. A MEWA formed after January 1, 2018, shall
provide during the first year after the commissioner issues the self-insured
MEWA's certificate of registration a quarterly update comparing projections to
actual experience.
e.
Modifications to plan of operation. A self-insured MEWA shall
file any modifications to the self-insured MEWA's plan of operation, including
but not limited to amendments to articles of incorporation and
bylaws.
(5)
Membership requirements.
a.
Any employer group or association that intends to form a self-insured MEWA
shall have been established for a good-faith purpose other than for the purpose
of providing insurance or a health plan.
b. The employer group or association that
wishes to form a self-insured MEWA shall have been in existence for a period of
five years at the time it seeks a certificate of registration as a self-insured
MEWA.
c. The employer group or
association sponsoring the self-insured MEWA shall collect annual dues from its
employer members.
d. Each employer
member that participates in an employee welfare benefit plan offered by the
self-insured MEWA may only provide coverage to "eligible employees" as defined
in Iowa Code section
513B2.. This
requirement only applies to the type of employees permitted to be employed by
an employer member of the self-insured MEWA and has no impact on what type of
rating must be utilized by the self-insured MEWA.
e. Any employer member that participates in
an employee welfare benefit plan offered by a self-insured MEWA shall be a
member of the employer group or association sponsoring the self-insured MEWA.
f. Any employer member that
participates in an employee welfare benefit plan offered by a self-insured MEWA
shall be required to participate in the self-insured MEWA for a period of not
less than five calendar years. Any contract issued by a self-insured MEWA to an
employer shall contain reasonable enforcement provisions, including but not
limited to reasonable fees or assessments for early departure or for enrollment
in another MEWA during the early-departure period.
g. The activities of the self-insured MEWA,
including the establishment and maintenance of the employee welfare benefit
plan, shall be controlled by the self-insured MEWA's employer members, either
directly or indirectly through the regular nomination and election of
directors, trustees, officers, or other similar representatives to control on
the employer members' behalf.
h.
The membership requirements set forth in paragraphs 77.3(5)"a"
through 77.3(5)"g" are not applicable to self-insured MEWAs
that received a certificate of registration from the commissioner prior to
January 1, 2018.
(6)
Policy or contract. All contracts issued by a self-insured
MEWA shall comply with the following:
a.
Notice to purchasers. Every self-insured
MEWA application for
coverage under the health plan and every policy and certificate issued by a
self-insured
MEWA shall contain in 14-point type or, if electronic, of
equivalent prominence, on the front page the following notice prominently
displayed:
NOTICE
This policy is issued by a multiple employer welfare
arrangement (MEWA). MEWAs are not subject to all of the insurance laws and
regulations of your state. State insurance insolvency guaranty funds are not
available for your MEWA.
Please review the policy closely to understand the
covered benefits.
b.
Guaranteed issue. Self-insured MEWAs shall offer on a
guaranteed-issue basis health coverage to all individuals who qualify as
enrollees of the employee welfare benefit plan offered by an employer member
participating in the self-insured MEWA.
c.
Types of benefits that can be
offered. Self-insured MEWAs shall offer only medical, dental, optical,
surgical, hospital, accident and sickness, prescription, life insurance, or
disability benefits. A self-insured MEWA that offers life insurance benefits
shall comply with all applicable provisions of the Iowa Code relating to life
insurance and life insurance companies.
d.
Compliance with HIPAA.
All contracts or policies issued by a self-insured
MEWA shall conform to all
the provisions of
P.L.
104-191, the Health Insurance Portability and
Accountability
Act of 1996 (HIPAA), including but not limited to guaranteed
issue of all products, preexisting condition limitations, renewability, and
portability provisions as well as the issuance of prior coverage certificates
to enrollees no longer eligible for plan coverage.
e.
Compliance with state
mandates. The employee welfare benefit plan offered by a self-insured
MEWA shall comply with all applicable state mandates, including Iowa Code
chapter 514C, as if the health benefit plan were a group health policy under
Iowa Code chapter 509.
f.
Actuarial value. Every health benefit plan offered by an
insurer to a self-insured MEWA must contain a level of coverage equal to or
greater than that designed to provide benefits that are actuarially equivalent
to 60 percent of the full actuarial value of the benefits provided under the
plan.
(7)
Disclosure. The following disclosure shall be made to each
employer member of the self-insured
MEWA in 14-point type or, if electronic, of
equivalent prominence, on the front page of the policy or certificate:
The benefits and coverages described herein are
provided through a self-insured trust fund established and funded in full or in
part by a group of employers. It is not a licensed insurance company, and it is
not protected by a guaranty fund in the event of insolvency.
(8)
Filing fee. A
filing fee of $100 shall accompany each application for a certificate of
registration as a self-insured MEWA.
(9)
Agreements and management
contracts. Any agreement between the self-insured MEWA and any
administrator, service company, or other entity shall be made available for
review in the office of the commissioner upon request by the
commissioner.
(10)
Examination.
a. Each
self-insured MEWA shall be subject to examination by the commissioner in
accordance with Iowa Code chapter 507, as a "company," and as if the
self-insured MEWA is an "insurer," under the definitions of that chapter. Iowa
Code chapter 507 shall govern all aspects of the examination.
b. The commissioner may make an examination
of a self-insured MEWA as often as the commissioner considers it necessary, but
not less frequently than once every five years. The expenses of the examination
shall be assessed against the self-insured MEWA being examined in a manner in
which expenses of examinations are assessed against a company under Iowa Code
chapter 507.
(11)
Trade practices and enforcement. A self-insured MEWA is
subject to applicable provisions of Iowa Code chapter 507B, and rules
promulgated under that chapter, as if the self-insured MEWA is a "person" as
defined in Iowa Code section
507B2(1).. The
commissioner may investigate whether a self-insured MEWA has violated this rule
and, after a hearing conducted pursuant to Iowa Code chapter 17A, may enter any
orders authorized under Iowa Code chapter 505, 507A or 507B.
(12)
Insolvency. The
provisions of Iowa Code chapter 507C shall apply to self-insured MEWAs, which
shall be considered insurers for purposes of that chapter. However, a
self-insured MEWA shall not be subject to Iowa Code chapter 508C.
(13)
Suspension or revocation of
certificate of registration. The
commissioner may sanction a
self-insured
MEWA or suspend or revoke any certificate of registration issued
to a self-insured
MEWA upon any of the following grounds:
a. Failure to comply with any provision of
these rules or any applicable provision of the Iowa Code.
b. Failure to comply with any lawful order of
the commissioner.
c. Failure to
promptly pay lawful benefit claims.
d. Committing an unfair or deceptive act or
practice.
e. Deterioration of
financial condition adversely affecting the self-insured MEWA's ability to pay
claims.
f. A finding that the
application or any necessary forms that have been filed with the commissioner
contain fraudulent information or omissions.
g. A finding that the self-insured MEWA or
its administrator has misappropriated, converted, illegally withheld, or
refused to pay over upon proper demand any moneys that belong to an employer
member, a participant, or a person otherwise entitled thereto and that have
been entrusted to the self-insured MEWA or its administrator in its fiduciary
capacity.