Texas QSEHRA Bill Passes Senate; AHP / MEWA Bill Languishes in Committee

Texas QSEHRA Bill Passes Senate; AHP / MEWA Bill Languishes in Committee

The Texas Senate recently unanimously passed legislation to formally change the Texas Insurance Code to harmonize it with the Qualified Small Employer Health Reimbursement Arrangements authorized in the federal 21st Centuries Cure Act passed by Congress in 2016.  By doing so, the legislation also conforms with a Texas Attorney General’s Opinion rendered last year.

The AG Opinion noted that a court would probably rule that the new federal law superseded then-existing state provisions.

The Senate’s 31-0 passage of Senate Bill 439 by Lubbock Sen. Charles Perry moves the legislation to the Texas House of Representatives where it awaits consideration by the House Insurance Committee.

In theory there is ample time left in the current Texas legislative session for SB 439 to pass the House and be sent to the Governor.  But several high profile, politically entwined issues have begun grabbing lawmakers’ time and attention, thus jeopardizing any bill not passed by now. Fewer than three dozen days remain before the regular session ends.

Clock Ticking on AHP / MEWA Bill

In the Bad Timing Dept, also, a heavy dose of lethargy or uncertainty may have doomed House Bill 2893, filed seven days before deadline, that would relax requirements for smaller businesses to have plans similar the federal DOL rule recently thrown out in federal court.

Texas House Bill 2893, by Houston Rep. Tom Oliverson, was considered by the House Insurance Committee but has been left “pending.”  If the bill does win Committee clearance, it must still pass the full House before going to the Senate for consideration.

“As health care costs rise, as insurance markets narrow, with the uncertainty of the Affordable Care Act and exchange compliant plans, It behooves us as a State to broaden our marketplace and try to bring in as many reasonable options to the table as we possibly can to make sure consumers have a variety of options to choose from that provide the coverage they need within a budget that they can afford,” Oliverson said.

HB 2893 would remove the requirement that employers be in same industry and also that a business be operating for two years before joining such a plan.  The bill would also have permitted self-employed individuals to join these plans.

Oliverson acknowledged that there were discussions at the federal level about AHPs and MEWAs but that it would still be wise for Texas to set up some options.

Tom Newell, representing Opportunity Solutions Project, testified for HB 2893, saying that if lawmakers thought large employers had good insurance, they should have no concern because “it is just allowing those small employers to be on the same playing field.”  Newell added that he was in the White House after the ruling and DOL was “going to move forward” with appeal.

Stacy Pogue, Senior Policy analyst with the Center for Public Policy Priorities, testified against HB 2893, saying that although the Texas Dept. of Insurance and other states regulators did much better today than the federal government in regulating MEWAs for financial and solvency concerns, there were still challenges in preventing shady practices.  According to Pogue, in 2001-2003 TDI shut down 129 MEWAs in Texas with 20,000 employees.

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