WBA member banks may soon see improvements and cost efficiencies in their health insurance plans, if proposed rules are adopted. On February 28, WBA submitted a comment letter to the Department of Labor Office of Regulations and Interpretations regarding a proposed rule updating the definition of employer and small business health plans. The proposed regulation relates to Association Health Plans (AHPs) under Title I of the Employee Retirement Income Security Act (ERISA).

The DOL's proposal would broaden criteria under ERISA section 3(5) for determining when employers may join together in an employer group or association that is treated as the "employer" sponsor of a single multiple-employer "employee welfare benefit plan" and "group health plan" as those terms are defined in Title I of ERISA. By treating the association itself as the employer sponsor of a single plan, the regulation is intended to facilitate the adoption and administration of such arrangements. The DOL states that the goal of the rulemaking is to expand access to affordable health coverage, especially among small employers and self-employed individuals, by removing undue restrictions on the establishment and maintenance of association health plans under ERISA. 

In the comment letter, WBA supported the proposal's goal to expand the availability of affordable health insurance plans to small businesses, but believes additional oversight is warranted for AHPs that do not have a membership connection to an existing association. WBA expressed concern that new associations, absent the DOL's watchful eye, will literally pop up overnight for the sole purpose of making a profit by implementing thinly capitalized plans while disregarding the goal of the proposal.

If this rule is finalized without significant changes, WBA EBC will be able to offer enhanced health insurance plans for WBA member banks. WBA EBC staff are currently studying the rule and its potential impact so we will be ready to capitalize on behalf of WBA's member banks should it be adopted. 

If you have any questions about the proposed rule, WBA's comments, or how the rule could impact your bank's employee health insurance plan, please don't hesitate to contact Daryll Lund, 608-441-1203 or Brian Siegenthaler, 608-441-1211.

Lund is WBA executive vice president - chief of staff and president of EBC and MBIS.