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Policy

Association Health Plans: What’s All The Fuss About?

Abstract

 
Policymakers have tried to address the problem of the uninsured and to help small businesses with rising premiums by encouraging associations to offer coverage. Although supporters and opponents have made claims about the potential impact of this strategy, the association market has not been studied in depth. Examining current standards might explain why proponents seek changes. This paper discusses states’ approaches to regulating health insurance offered by associations, including "self-insurance," as well as existing state exemptions from state insurance laws that otherwise would apply to coverage sold to small businesses, self-employed people, and individual purchasers. We also examine market problems such as insolvency and fraud.

Several recent bills would encourage growth of association health coverage: S. 1955, which was narrowly defeated on a procedural vote in the Senate in May 2006, and H.R. 525, which the House passed in the summer of 2005. Although the House has passed AHP bills several times, no such bill has made it out of committee for a floor vote in the Senate.² These recent events in the Senate put AHP-related issues once again at the forefront of health reform debates in Congress.

Although AHP supporters and opponents have made claims about the potential impact of expanding and encouraging the growth of associations and their role in financing health care, the association market has not been the subject of in-depth study. Examining current standards might explain why proponents seek changes that range from full to partial exemptions from state insurance standards.

In this paper we discuss various approaches that states have taken to regulating health insurance offered by associations, including "self-insurance." We also examine market failures such as insolvency and fraud. Our paper is based on an analysis of state insurance laws, surveys, and interviews with state insurance regulators from all fifty states and the District of Columbia.³

Background

Top Background Current Regulation Concluding Remarks NOTES

 
Millions of Americans with private health insurance are covered through group-purchasing arrangements such as associations and purchasing coalitions that offer health coverage to employers, self-employed people, and, in some cases, individual members.⁴ Even though there are operational differences among the group-purchasing arrangements, a commonality exists in their goal to provide an alternative way to buy health insurance coverage.

Although some arrangements are quasi-governmental, most are private, typically involving an association that either endorses, negotiates, or self-insures health coverage for members. Some limit membership to a particular trade, while others allow anyone to join.⁵ Typically, only members of the association are allowed to enroll in the health plan.⁶ Although many associations are independent, some are affiliated, managed, or owned by insurers that set up associations as marketing vehicles to benefit from less restrictive state laws where applicable.⁷

Association health coverage has been especially popular with small businesses and individual consumers because of a presumption that large groups have more market clout and negotiating power than small groups or individuals, a promise of better rates and benefits, and, in some cases, a promise of more consumer protections than are available in the individual market.⁸ Although evidence to substantiate such claims is mixed, many businesses and people nonetheless look to associations for health insurance coverage.⁹ According to researchers, one of every four employers (and one of every three businesses with fewer than ten employees) provides benefits through association-type arrangements.¹⁰ Some data are available from state insurance regulators in support of this finding. For example, regulators in Georgia estimate that associations cover 1.5 million residents, in contrast to the state’s traditional small-group market that covers 300,000 people.¹¹

Current Regulation

Top Background Current Regulation Concluding Remarks NOTES

 
States are the primary regulators of coverage that associations offer. Some associations must also comply with federal requirements. Non-job-based health insurance is regulated primarily by states. In contrast, association coverage for employers must comply with both state and federal requirements.

State requirements. Requirements vary across and even within states. Which standards apply depends on the type of policy sold—whether the association or each association member is the policyholder, who the members are (businesses or individuals), and whether the association is in-state or national.

Insurers may sell association coverage in one of two ways. They may issue policies either to members directly or to the association. How a policy is issued affects the consumer protections that apply. When a policy is issued directly to association members, the policy must comply with all standards applicable to small-group or individual health insurance policies in the state where the business is located or the consumer lives.¹² When a policy is issued to an association, members receive "certificates of coverage," and the association is the "policyholder." With few exceptions, such coverage must comply with standards for "large groups," akin to coverage sold to other groups such as large and midsize employers.

Generally, compared with individual and small-group coverage, fewer state standards apply to large-group coverage (for example, there are no rating restrictions to limit premium variation based on health status).¹³ A presumption is that large groups are in a good position to negotiate with insurers on behalf of members and therefore do not need as many protections. However, that is not always the case; sometimes insurers will insist on underwriting members of the association separately. For example, even though thousands of people may belong to an association, sick members might be asked to pay higher premiums for their coverage than healthy members are charged, or they might be subject to exclusion riders that eliminate coverage for their pre-existing conditions. Therefore, a few states have more stringent requirements for association coverage than they have for individual coverage. For example, thirteen states prohibit the use of elimination riders and require credit for prior coverage in association health plans but do not apply these protections in the individual market.¹⁴ Some states require group policies to cover benefit mandates that are not required in individual policies (Exhibit 1).

National associations. Coverage sold through an association located out of state (also called a multistate or national association, or out-of-state trust) are regulated differently than in-state associations. National association coverage may be exempt from some or all standards applicable to large-group coverage. This regulatory framework was developed initially in some states to encourage small insurance companies to do business in those states and to encourage competition.

Twenty-four states exempt coverage sold through national associations from some or all standards that apply to in-state association coverage, including substantive requirements such as benefit mandates and administrative requirements such as rate and form filings (Exhibit 2). According to insurers, these filings add to the cost of selling insurance. In fact, a change to rate-filing requirements is viewed by at least one insurer (in the association market) to be as costly as requiring companies to sell insurance on a guaranteed-issue basis (covering people regardless of their past or current health status).¹⁶ Such exemptions, however, can have strong market impacts.

With respect to form and rate filings, state policymakers have made trade-offs between the need to prevent problems to protect consumers and the cost of such filings to insurers. For instance, where association coverage is exempt, instead of filing rates for review by regulators, an insurer is allowed to file a certification that it is in compliance (regulators do not see actual rates), or it might be exempt from filing rates altogether. We found that of the forty-seven states that require some type of rate filing for individual health insurance policies, nineteen states have less stringent or no requirements for in-state association policies and twenty-six have less stringent or no requirements for national association policies. Also, of the fifty states that require some type of form filing for individual health insurance policies, three states have less stringent or no requirements for in-state association policies and nineteen have less stringent or no requirements for national association policies.¹⁸

When exempt, national association coverage is not regulated by the state where the small business or the consumer is located; instead, it is regulated under the standards of the state where the master contract is issued to the association. Generally, this is where the association is headquartered or, if the policy is held in a trust, the location of the trust, typically in a state with few requirements for association health insurance. According to regulators, popular locations have been Alabama, the District of Columbia, Illinois, Mississippi, Missouri, Rhode Island, and Texas. Some states have modified their laws, eliminating exemptions in part to respond to consumers’ complaints. As a result, there are now fewer associations and trusts in some of these states.

Some regulators believe that association exemptions have given rise to a variety of problems, including premium increases that otherwise would be prohibited for other products, and misleading marketing, which induced some people to mistake limited-benefits coverage for comprehensive group health insurance.¹⁹ Also, because of restrictions on authority, consumers cannot always receive help from their own state regulators. In such cases, they are referred to the state where the association (or trust) is located. However, resource constraints and other considerations might prevent regulators from assisting out-of-state consumers. Consequently, no regulator helps a consumer covered by a national association.

Associations’ ability to offer coverage to members. Insurers’ decisions about whether to sell association, small-group, or individual policies are influenced by several factors, including administrative and marketing efficiencies and whether association coverage is subject to the same, stronger, or weaker standards than small-group and individual health insurance are. For instance, when an association offers or endorses an insurance product, it may provide a list of its members to the insurer or notify its members directly. This sales technique lowers insurers’ marketing expenses.²⁰ Selling through associations might also save regulatory compliance expenses, especially when there are few or no form and rate filing requirements.

Additionally, insurers’ decisions are influenced by which market’s laws are least restrictive. Compared to states where association plans are subject to rules that are the same as or more stringent than small-group or individual policies, states with fewer restrictions for association coverage tend to have more associations offering coverage and insurers selling such coverage. There is little benefit to insurers in selling coverage through associations when the rules are the same or more stringent. It is also more difficult for associations to offer coverage to members if insurers do not sell it. This partly explains why some associations are seeking help from Congress. Preferential rules for association coverage would encourage insurers to sell health insurance to associations, although it is unclear what, if any, new benefits enrolled members would gain.

Solvency requirements for self-insured associations. As an alternative to buying insurance, some associations self-insure. This means that the association (not an insurance company) is responsible for paying medical claims. Self-insured associations are also subject to state regulation. Generally, states take one of two approaches: They either create a special insurance license or require self-insuring associations to be licensed as any other insurers are. If an association self-insures and operates without a license, it is operating illegally and is considered "unauthorized." Twenty-eight states have a special license, which typically has fewer capital and reserve requirements than those applicable to insurance companies.²¹

Policymakers have made trade-offs in regulating self-insured associations. Lower solvency requirements mean that a self-insured association can offer coverage that is less costly than that offered by an insurer because the association is not required to have as much capital as insurers are. It also means that self-insured arrangements might be at higher risk of insolvency. Having a smaller financial cushion makes it more difficult to withstand unexpected events or a change in market conditions such as rapid increases in health costs. Between 2001 and 2003, four long-standing self-insured associations became insolvent, leaving $48 million in medical claims unpaid and 66,000 people and small businesses without insurance.²²

Federal requirements and history of fraud and abuse. An arrangement that offers coverage to employees of two or more employers or self-employed people is called a "multiple employer welfare arrangement" (MEWA) under the Employee Retirement Income Security Act (ERISA) of 1974—a federal law governing private-sector, job-based health and pension benefits. MEWAs must comply with ERISA’s requirements in addition to state law. Federal standards include fiduciary responsibilities; disclosure and notice requirements regarding health services covered by the plan; standards added to ERISA by the Health Insurance Portability and Accountability Act (HIPAA) of 1996; and a MEWA-specific requirement to register with the U.S. Department of Labor (DOL).

ERISA requirements for MEWAs have developed largely as a result of a history of fraud and abuse, such as health insurance scams promoted through multiple-employer arrangements. Operators collect premiums but fail to pay medical claims, illegally diverting funds for personal use. They leave small businesses and self-employed people, workers, and their dependents with major medical debt and without insurance.²³

These scams first appeared after ERISA’s enactment. Multiple employer arrangements were a vehicle of choice for promoters of phony insurance because of minimal federal oversight and ERISA’s preemption of states over "employee benefit plans," which promoters of scams inevitably claimed to be. After extensive investigations, in 1982 Congress amended ERISA to clarify that states could regulate any entity considered to be a MEWA regardless of whether it also might qualify as an employee benefit plan.

Promoters of scams continue to use ERISA as a shield, delaying state actions by removing state cases to federal court, and claiming to be self-insured, single-employer ERISA plans, which continue to be regulated solely by the federal government.²⁴ Illegal health plans flourish especially during periods of high premium increases. For example, from 1988 to 1991, scams left 400,000 people with more than $123 million in unpaid medical bills.²⁵ Between 2000 and 2002, 144 scams left more than 200,000 policyholders with more than $252 million in medical bills.²⁶ The most prevalent way to sell phony insurance continues to be either through real or phony associations.²⁷

In an effort to address the problem of association insolvency and fraudulent health insurance, Congress amended ERISA in 1996, giving the DOL the authority to require fully insured and self-insured MEWAs to register.²⁸ However, fraud continues. During the most recent cycle, states shut down forty-one scams, while the federal government shut down three.²⁹ In 2005 there were two successful criminal actions: Operators of TRG (one of the three largest schemes) pled guilty in Florida state court, and a federal jury found the principal operator of Employer’s Mutual LLC guilty of money laundering, misappropriations, mail fraud, conspiracy, and obstruction of justice.³⁰

MEWA registration. In 2000 the DOL implemented a MEWA registration requirement called Form M-1.³¹ In 2003, 595 MEWAs properly filed a Form M-1 for 2002. Approximately 100 of 700 forms filed had problems such as missing, conflicting, or inaccurate information.³² Registered MEWAs covered an estimated 5 million people, 1.6 million of whom were in self-insured arrangements. MEWAs reported operating in every state. Some self-insured MEWAs registered with the federal government even though they did not have a proper state license to offer self-insured coverage.³³

The DOL estimates that there is a high noncompliance rate and that fewer than half of existing MEWAs are registered.³⁴ This means that millions of Americans might be covered by arrangements that are escaping oversight and are at risk of being left with unpaid bills.

Although the DOL may fine MEWAs up to $1,000 per day for submitting incomplete or inaccurate filings, at the time of the study, no fines had been levied. There also was no evidence that federal regulators had reviewed the filings. For instance, two of the four insolvent associations had registered and provided information warranting an investigation—one notified the DOL that it was out of compliance with ERISA’s requirements, and the other had doubled in size in one year, which raised questions about its ability to stay solvent. These two MEWAs left 44,000 people with $35 million in unpaid bills. A review of the filings and an investigation perhaps could have prevented or mitigated the effects of the insolvencies.³⁵ Although the DOL has new authority to help identify fraud and abuse, there is little evidence that it is being used, perhaps as a result of limited resources.

Congress might have to look at other ways to combat fraud and insolvency in the association market. An effort to expand the DOL’s role and restrict states’ role, as AHP bills seek to do, would run the risk of worsening fraud and abuse in the association market.

Concluding Remarks

Top Background Current Regulation Concluding Remarks NOTES

 
There continues to be strong congressional interest in encouraging the growth of association health coverage. Lessons from state regulation of such products should help inform the national public policy debate. When one is considering legislation to expand association health insurance, it is important to understand the current market and history.

States’ approaches to regulating health insurance offered by associations vary. Some apply more stringent standards to in-state associations than to other types of health insurance, but about half exempt national association coverage from some or all state-based standards. Some exemptions, such as rate and form filings, make it more difficult to prevent problems, while others restrict regulators’ authority to resolve the problems of state residents who purchase coverage through national associations. Despite some exemptions, state policymakers generally require small-group rating reforms to apply. Without this requirement, insurers through associations can segment the market, causing rates for nonassociation coverage to increase and undermine a goal of small-group reforms to broadly spread risk. States that apply the same or more stringent rules to association coverage compared with small-group and individual health insurance report seeing few associations in their markets offering health coverage. The difficulty that some associations have in finding insurers to provide benefits could be one reason why some seek federal exemptions from state laws. It is uncertain whether having many associations offering coverage improves the quality or price of coverage for enrolled small-group and individual members. However, it is certain that partial or full exemptions leave some consumers unprotected.

With respect to "self-insurance," in twenty-eight states, lower financial requirements than applicable to insurers might expose consumers to a higher risk of insolvency. Additionally, the long history of phony insurance, sold through real and phony associations, also warrants caution when seeking to expand association health insurance, especially when such expansion would preclude state investigations and action. Proposals to expand the role of associations should ensure that businesses and people are adequately protected.

Editor's Notes

 
Mila Kofman (mk262{at}georgetown.edu) is an associate research professor at the Georgetown University Health Policy Institute in Washington, D.C. Kevin Lucia is an assistant research professor there; Eliza Bangit is a senior researcher; and Karen Pollitz is project director and an adjunct professor.

This paper is based on research funded by the Changes in Health Care Financing and Organization (HCFO) initiative, a project of the Robert Wood Johnson Foundation (RWJF). The views expressed here are solely those of the authors and should not be attributed to HCFO, the RWJF, or its board of directors. The authors express their gratitude to the committee of experts who graciously gave their time and advice to this project and paper. They also thank Katie Fink for her assistance.

NOTES

Top Background Current Regulation Concluding Remarks NOTES

 

1. M. Kofman and K. Polzer, "Federal Association Health Plans: Will This Proposal Remedy the Health Insurance Crisis?" Policy, Politics, and Nursing Practice 5, no. 3 (2004): 167–173.
2. Unlike H.R. 525, S. 1955 would not permit self-insured associations. See M. Kofman and K. Pollitz, "Health Insurance Regulation by States and the Federal Government: A Review of Current Approaches and Proposals for Change," Journal of Insurance Regulation 24, no. 4 (2006): 77–107.
3. Because of the complexity of state laws, we interviewed state regulators responsible for reviews of policy forms and rates, actuaries, attorneys, deputy commissioners in charge of the health divisions and consumer services offices, and other state insurance department staff members.
4. M. Kofman, Group Purchasing Arrangements: Issues for States, Issue Brief 4, no. 3 (Washington: AcademyHealth, April 2003). See also S.H. Long and M.S. Marquis, "Pooled Purchasing: Who Are the Players?" Health Affairs 18, no. 4 (1999): 105–111[Abstract]; and R.E. Curtis, E. Neuschler, and R. Forland, "Consumer-Choice Purchasing Pools: Past Tense, Future Perfect?" Health Affairs 20, no. 1 (2001): 164–168.[Free Full Text]
5. There are also associations for people with similar personal interests, including hobbies.
6. States generally do not restrict membership. An association may have multiple levels of membership, such as regular and affiliate, similar to what federal proposals would allow.
7. M. Kofman et al., "Association Health Insurance: Is It Time to Regulate This Product?" Journal of Insurance Regulation 24, no. 1 (2005): 31–45.
8. Proponents of federal AHP bills argue that eliminating state insurance requirements would allow large associations to negotiate better rates for members. Because of market complexities, even with an exemption from state law, much better rates for associations are unlikely. Insurance premiums reflect use of medical care. An AHP’s rates could be better if its members are low users of medical care. Independent analysts attribute lower AHP premiums to risk selection. See Congressional Budget Office, "H.R. 660: Small Business Health Fairness Act of 2003 (as passed by the House on June 19, 2003)," 11 July 2003, http://www.cbo.gov/showdoc.cfm?index=4413&sequence=0 (accessed 22 June 2006). Furthermore, unlike a large employer, an AHP is a voluntary, self-selected group whose members can enroll and disenroll from the health plan at any time. The initial rates for an AHP will reflect this churning and potential adverse selection. For self-insured AHPs, rates are unlikely to be better because of fixed functions such as administrative costs. It is also unlikely that AHPs can negotiate better rates than large national insurers have with providers. For these and other reasons, in the insurance context, large does not always equate with negotiating power to obtain better rates and benefits.
9. For additional information about group-purchasing arrangements, see S.H. Long and M.S. Marquis, "Have Small-Group Health Insurance Purchasing Alliances Increased Coverage?" Health Affairs 20, no. 1 (2001): 154–163[Abstract/Free Full Text]; J.M. Yegian et al., "The Health Insurance Plan of California: The First Five Years," Health Affairs 19, no. 5 (2000): 158–165[Medline]; M.A. Hall, E.K. Wicks, and J.S. Lawlor, "HealthMarts, HIPCs, MEWAs, and AHPs: A Guide for the Perplexed," Health Affairs 20, no. 1 (2001): 142–153[Abstract/Free Full Text]; U.S. Government Accountability Office, Private Health Insurance: Cooperatives Offer Small Employers Plan Choice and Market Prices, Pub. no. GAO/HEHS-00-49 (Washington: GAO, 2000); and CBO, Increasing Small-Firm Health Insurance Coverage through Association Health Plans and Healthmarts, January 2000, http://www.cbo.gov/showdoc.cfm?index=1815&sequence=0 (accessed 22 June 2006). For additional information about the potential impact of federal AHP legislation, see CONSAD Research Corporation, The Projected Impacts of the Expanded Portability and Health Insurance Coverage Act on Health Insurance Coverage, 10 July 1998, http://www.consad.com/reports/healthinsport.pdf (accessed 22 June 2006); R.C. Chu and G.R. Trapnell, "Study of the Administrative Costs and Actuarial Values of Small Health Plans" (Summary), January 2003, http://www.sba.gov/advo/research/rs224.pdf (accessed 31 July 2006); and B. Fritchen and K. Bender, Impact of Association Health Plan Legislation on Premiums and Coverage for Small Employers (Washington: Mercer Risk, Finance, and Insurance Consulting, June 2003).
10. Long and Marquis, "Pooled Purchasing."
11. See Kofman, "Association Health Insurance."
12. In a few states, laws governing small-group and individual coverage apply regardless of the policyholder.
13. Marketing materials might lead consumers to believe that they are buying coverage with the same protections that job-based coverage has (guaranteed access to an employer’s health plan, nondiscrimination protections, preexisting condition exclusion limits, and premium restrictions). In most states, a consumer can be individually underwritten, and unlike with employer coverage, a person’s past and current medical conditions may be considered before the person is accepted for insurance, existing or past medical conditions may not be covered under the policy at all, and the premium is likely to be based on the person’s risk factors. For example, see American National Life Insurance Company of Texas, "The American Champion Plus Select" (description of Group Policy no. NCAA003 issued to the NCAA, ANTEX’s Policy Form Series ANL-2001P, available from the authors). Also, see Colorado Division of Insurance, Market Conduct Examination Report: Mid-West National Life Insurance Company of Tennessee (Denver: Colorado Division of Insurance, 31 December 1998), 7. According to Colorado’s regulators, the insurer’s "association group accident and health division produces individually underwritten major medical products."
14. States include AZ, CO, FL, GA, KS, MT, NH, NM, OK, OR, PA, SD, and WV. Georgetown University Health Policy Institute, "Survey of State Insurance Regulators: Regulation of Associations 2003–2004" (Washington: Georgetown University HPI, unpublished). In practice, higher requirements might not benefit intended consumers because a state lacks the types of reforms necessary to allow people with medical needs to enroll in association coverage. Consumer protections such as guaranteed issue, rate restrictions, portability, and coverage design work together.
15. Many states with small-group laws called "rate bands" (limits on use of health factors in premiums) permit insurers to consider their association business a separate rating class for purposes of applying state rating restrictions. The difference in base rates between association and small-group coverage must be within a specified permissible range. The rate differences for small businesses within an association would be limited the same way as they are outside the association. But there may be different rates for similar coverage, depending on whether the policy is bought through an association. See Kofman and Pollitz, "Health Insurance Regulation by States and the Federal Government."
16. See Health Markets, "UICI Announces Settlement Reached in Association Group Litigation," Press Release, 14 May 2004, http://www.healthmarkets.com/home/media/press_releases/2004_Press_Releases/2004_05_14_Settlement_Reached.html (accessed 31 July 2006).
17. According to market-conduct exams and a review of captive association policies, nondisclosure or improper disclosure of covered mandates is a problem. Colorado Division of Insurance, Market Conduct Examination Report: John Alden Life Insurance Company (Denver: Division of Insurance, 31 December 1999), 62. MEGA Life and Health Insurance company, a subsidiary of UICI, was found to be in violation of Colorado’s insurance laws for failure to file policy forms, to disclose to enrollees that the policy covers certain benefits, to disclose out-of-pocket expenses accurately, to comply with portability requirements, and to disclose accurate information about the renewability of policies and the availability of guaranteed-issue policies. Colorado Division of Insurance, Market Conduct Examination Report: The MEGA Life and Health Insurance Company (Denver: Division of Insurance, 31 December 2001), 12–14.
18. States with less stringent or no rate-filing requirements for in-state policies include AZ, AR, CA, CT, FL, GA, ID, IN, IA, MI, NH, OH, OR, PA, SC, SD, TX, VA, and WI. States with less stringent or no rate-filing requirements for national policies include AZ, AR, CA, CT, FL, GA, HI, ID, IA, KY, ME, MD, MI, MN, NE, NH, NV, OH, OR, PA, SC, SD, TN, TX, VA, and WI. States with less stringent or no form-filing requirements for in-state policies include AZ, MN, and WV. States with less stringent or no form-filing requirements for national policies include AL, AZ, DE, FL, HI, IL, IA, ME, MD, MN, MO, NE, NV, OR, PA, TN, VA, WV, and WI. For both rate-filing and form-filing requirements, Minnesota and Wisconsin apply requirements that are applicable to in-state associations when at least 25 percent of the members of a national association are residents of the state. Vermont applies standards when twenty-six certificate holders are in state. Georgetown University Health Policy Institute, "Survey of State Insurance Regulators."
19. Kofman, "Association Health Insurance"; Addison v. American Medical Security, Case no. CL 00-01445 AB, at 12 (Fla. Cir. Ct. 15th Cir., 22 May 2002) (Final Judgment on Liability); Commissioners and Directors of Insurance of the States of Indiana, Iowa, Kentucky, Minnesota, Missouri, Ohio, North Dakota, South Dakota, and Wisconsin, Market Conduct Examination Report of Golden Rule Insurance Company (State Departments of Insurance, 13 June 2002), 11; State of Washington, Office of Insurance Commissioner, Report of Target Market Conduct Examination of American National Insurance Company (Olympia: Washington Office of Insurance Commissioner, 20 December 1999), 4; Maine Bureau of Insurance, In re: PFL Life Insurance Company, Docket no. MCINS 97-19 (Augusta: Maine Bureau of Insurance, 2001), 3; C. Terhune, "Coverage Limits: Nonprofit Groups That Tout Insurance Have Hidden Links: Associations That Offer Deals Are Often Set Up by Insurer," Wall Street Journal, 21 November 2002; and C. Terhune, "Insurer’s Tactic: If You Get Sick the Premium Rises," Wall Street Journal, 9 April 2002.
20. Authors’ discussion with Paul C. Latchford, vice president, Law and Governmental Affairs, AEGON, Direct Marketing Services Inc., 15 October 2003.
21. These states are AK, CA, CO, FL, GA, ID, IN, IA, KY, LA, ME, MI, MN, MO, MT, NE, NH, NJ, NM, NC, OH, OK, OR, SC, SD, TN, TX, and WA. See M. Kofman and J. Libster, "Turbulent Past, Uncertain Future: Is It Time to Reevaluate Regulation of Self-Insured Multiple Employer Arrangements?" Journal of Insurance Regulation 23, no. 3 (2005): 17–33.
22. Sunkist Growers Plan (2001); Indiana Construction Industry Trust (2002); NJ Coalition of Automotive Retailers (2002); and NJ Licensed Beverage Association (2003).See also M. Kofman, K. Lucia, and E. Bangit, MEWAs: The Threat of Plan Insolvency and Other Challenges (New York: Commonwealth Fund, March 2004).
23. M. Kofman, K. Lucia, and E. Bangit, Proliferation of Phony Health Insurance: States and the Federal Government Respond (Washington: BNA Plus, 2003).
24. See M. Kofman, Loss of State Oversight Means Regulatory Vacuum and More Fraud (Washington: Georgetown University Health Policy Institute, Summer 2005).
25. GAO, Employee Benefits: States Need Labor’s Help Regulating Multiple Employer Welfare Arrangements, Pub. no. GAO/HRD-92-40 (Washington: GAO, 1992).
26. GAO, Private Health Insurance: Employers and Individuals Are Vulnerable to Unauthorized or Bogus Entities Selling Coverage, Pub. no. GAO-04-312 (Washington: GAO, 2004).
27. Ibid.
28. 29 CFR 2520 (9 April 2003), 17497.
29. GAO, Private Health Insurance.
30. State v. Zanfei, No. 2003-CF-4414 (Fla. Orange County Ct. 9th Cir. June 2005); State v. Crouse, No. 2003-CF-4414 (Fla. Orange County Ct. 9th Cir. June 2005); and U.S. Department of Justice, "Operator of Employers Mutual Convicted of Fraud for Operating Bogus Health Insurance Provider," Press Release, 16 November 2005, http://www.usdoj.gov/usao/cac/pr2005/156.html (accessed 31 July 2006).
31. HIPAA added a new section [101(g)] to ERISA Title 1.
32. M. Kofman, E. Bangit, and K. Lucia, "Multiple Employer Arrangements: Another Piece of a Puzzle, Analysis of M-1 Filings," Journal of Insurance Regulation 23, no. 1 (2004): 63–88, at 77.
33. See Kofman and Libster, "Turbulent Past, Uncertain Future." The federal government posts Form M-1 on the U.S. Department of Labor Web site (http://askebsa.dol.gov/epds) but does not provide in-depth analysis by state; MEWAs are not required to report the total number of people covered (just the number of covered employees). For state-specific analysis, see Changes in Health Care Financing and Organization (HCFO), "MEWA Database: Search Detailed State Information," http://www.hcfo.net/mewa (accessed 31 July 2006).
34. "Reporting by Multiple Employer Welfare Arrangements," Federal Register 68, no. 68 (9 April 2003): 17495, 17498.
35. Kofman et al., "Multiple Employer Arrangements," 84–85.

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