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LRB-5575/1
TJD:emw
2017 Special Session
2017 - 2018 LEGISLATURE
Employer groups for self-funded health coverage
Preliminary Draft - Not Ready For Introduction
February 21, 2018 - Printed by direction of Senate Chief Clerk.
AB920-engrossed,1,3 1An Act to create 146.79, 600.01 (1) (b) 13. and 601.415 (14) of the statutes;
2relating to: employer groups for self-funded health care coverage and
3granting rule-making authority.
Analysis by the Legislative Reference Bureau
Engrossment information:
The text of Engrossed 2017 Assembly Bill 920 consists of the following
documents adopted in the assembly on February 20, 2018: the bill as affected by
Assembly Amendments 1, 4, and 5. The text also includes the February 21, 2018,
chief clerk's correction to Assembly Amendment 5 to Assembly Bill 920.
Content of Engrossed 2017 Assembly Bill 920:
This bill allows the establishment of employer groups to jointly provide health
care benefits on a self-funded basis to the employers' eligible employees and their
dependents under a health care benefit arrangement. Two or more employers that
are members of the same chamber of commerce or industry-based association may
form an employer group. Employer groups that provide evidence to the
commissioner of insurance that they have formed and are able to comply with the
requirements in the bill qualify to participate in the self-funded health benefits
project. To qualify as an employer group, the employer group must create and

maintain a formal organizational structure, control functions and activities of the
employer group through nomination and election of representatives, and be formed
from a chamber of commerce or industry-based association that meets certain
criteria such as being actively in existence for at least five years.
Each employer group in the project must, among other requirements, do all of
the following: determine all matters necessary for administration and operation of
the employee health care benefit arrangement; determine, based on an actuary's
recommendations, the amount that each employer must contribute for the health
care benefit arrangement, administrative expenses, and excess or stop-loss
coverage; establish a minimum participation period of no less than three years for
an employer to participate unless the employer meets special circumstances
established by the employer group; specify the procedures to be followed in the event
of insolvency; and report annually to the commissioner of insurance on the stability
of the group and its finances. The employer group may specify minimum
participation requirements that employers must meet to participate, but must, with
certain exceptions, allow any employer that is a member of the same chamber of
commerce or industry-based association and agrees to comply with those
requirements to participate. If an employer does not pay the required contribution,
the employer group must terminate the participation of the employer. If an employer
terminates participation in an employer group voluntarily or involuntarily, the
employer is responsible for contribution amounts required during the employer's
participation and the employer's proportionate share of the cost of claims payable
before the termination.
Each employer group in the project must require each of its participating
employers to offer the same health care benefits or health care benefit arrangements
with minimally different actuarial values to all eligible employees and dependents.
The health care benefit arrangement must include coverage of certain individuals,
treatments, and conditions that private health insurance is required to cover under
current law, including the following: extension of coverage of children with
disabilities; coverage of individuals who have been victims of domestic violence and
covering illness or disease resulting from abuse or domestic abuse; extension of
dependent child coverage to a certain age; coverage of a spouse or dependent under
certain family circumstances; coverage of HIV infection or illness or a medical
condition arising out of HIV infection; coverage of adopted children; coverage of
certain mental health treatments; coverage of services provided by a certain type of
provider, including chiropractors, if the plan generally covers the services; and
coverage of home care, skilled nursing care, kidney disease treatment, newborn
infants, grandchildren, diabetes equipment and supplies, maternity, mammograms,
drugs for HIV infection treatment, lead poisoning screening, correction of
temporomandibular disorders, hospital and ambulatory surgery center charges,
anesthetics for certain dental care, autism spectrum disorders, breast
reconstruction, certain immunizations, students on medical leave, hearing aids and
cochlear implants for children, colorectal cancer screening, and contraceptives. The
bill also imposes on health care benefit arrangements certain cost-sharing

requirements on oral and injected chemotherapy and prohibits the arrangements
from requiring individuals to have or from basing coverage on genetic testing.
Each employer group in the program is required to pay no more than $50,000
in benefits for each covered individual in a calendar year, unless an independent
actuary confirms the employer group is financially capable of paying more. The
employer group is required to obtain excess or stop-loss coverage in an amount
sufficient to pay the excess amount of claims.
The bill specifies that the employer group is not considered an insurer, and the
health care benefit arrangement is not considered an insurance contract, for any
purpose. With limited exceptions, insurance statutes and rules do not apply to an
employer group or a health care benefit arrangement. The commissioner is allowed
to examine the solvency of an employer group and promulgate rules regarding the
solvency of employer groups and may require an employer to take corrective action
or impose another enforcement action on employer groups based on violations of any
rules the commissioner promulgates. The commissioner is also allowed to
promulgate rules to implement federal law if the federal Department of Labor
promulgates a final rule that allows the states to have regulatory authority over
association health plans.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
AB920-engrossed,1 1Section 1 . 146.79 of the statutes is created to read:
AB920-engrossed,3,62 146.79 Employer group self-funded health benefits project. (1)
3Definition. In this section, “eligible employee” means an employee who works on a
4permanent basis and has a normal work week of 30 or more hours and includes all
5of the following, if included as an employee under the health care benefit
6arrangement under this section:
AB920-engrossed,3,77 (a) A sole proprietor.
AB920-engrossed,3,88 (b) A business owner, including the owner of a farm business.
AB920-engrossed,3,99 (c) A partner of a partnership.
AB920-engrossed,3,1110(d) A member of a limited liability company or a corporation defined under 26
11USC 1361
(a) (1).
AB920-engrossed,4,5
1(2) Employer groups; qualification. (a) Two or more employers that are
2members of the same chamber of commerce or industry-based association may form
3an employer group to establish and administer an employee health care benefit
4arrangement to jointly provide health care benefits on a self-funded basis to eligible
5employees of employers in the group and the dependents of those eligible employees.
AB920-engrossed,4,76 (am) To qualify under par. (b), an employer group shall satisfy all of the
7following:
AB920-engrossed,4,98 1. The employer group creates and maintains a formal organizational structure
9with a governing body and an indication of formality, such as having by-laws.
AB920-engrossed,4,1310 2. The employers in the employer group control functions and activities of the
11employer group, including establishment and maintenance of the employee health
12care benefit arrangement, directly or indirectly through nomination and election of
13representatives that control the employer group or association.
AB920-engrossed,4,1914 3. The chamber of commerce or industry-based association from which the
15employer group is formed is actively in existence for at least 5 years before providing
16evidence to the commissioner under par. (b), has at least 5 members for the 5 years
17before providing evidence to the commissioner under par. (b), and is formed and
18maintained in good faith for purposes other than obtaining or providing health
19benefits.
AB920-engrossed,5,220 (b) Employer groups that provide evidence to the commissioner of insurance
21that they have formed and are able to comply with the requirements of this section
22qualify to participate in the project under this section. When employer groups have
23qualified under this paragraph, the commissioner of insurance shall submit a notice
24to the legislative reference bureau for publication in the Wisconsin Administrative

1Register that lists the employer groups that have qualified and the date on which
2each group provided the necessary evidence of compliance.
AB920-engrossed,5,4 3(3) Employer group duties and powers. (a) Each employer group qualified
4under sub. (2) (b) shall do all of the following:
AB920-engrossed,5,65 1. Determine all matters necessary for the administration and operation of its
6employee health care benefit arrangement.
AB920-engrossed,5,77 2. Designate an agent for service of process, notice, or demand.
AB920-engrossed,5,178 4. Employ or contract with an actuary to make recommendations, in
9accordance with generally accepted actuarial principles, as to the sufficient amount
10of funding for the employee health care benefit arrangement. The employer group
11shall ensure that the actuary making recommendations under this subdivision is in
12good standing with the Academy of Actuaries, has the skills and knowledge
13necessary to perform the analyses and make the recommendations, and is
14performing the analyses and certifications based on sound actuarial principles. The
15employer group satisfies the requirement under this subdivision if the employer
16group contracts with an insurer or a 3rd-party administrator that employs an
17actuary.
AB920-engrossed,6,318 5. Determine, based on the actuary's recommendations under subd. 4., the
19amount that each employer that is participating in the employer group shall
20contribute to self-fund the employee health care benefit arrangement; to pay
21administrative expenses, including the actuary's compensation; and to purchase
22excess or stop-loss coverage, as described under sub. (5) (b). The contribution
23amount under this subdivision may vary by employer based on criteria developed by
24the employer group. An employer group may require employers in the employer
25group to contribute payments for establishing a surplus fund and may levy an

1assessment whenever the amount of any loss or expense that is due exceeds the
2assets of the employer group or the surplus fund amount established by the employer
3group is impaired.
AB920-engrossed,6,104 6. Establish a minimum participation period for an employer's participation in
5the employer group, which shall be the same length for each employer participating
6in the employer group and may not be less than 3 years. An employer group may
7specify circumstances under which a participating employer may discontinue
8participation in the employer group before the minimum participation period
9established under this subdivision ends without forfeiting all or a portion of the
10amount paid by the employer under sub. (4) (a) 2.
AB920-engrossed,6,1311 7. Annually submit a report to the commissioner of insurance describing the
12stability of the employer group and the finances of the employer group and
13containing any information specified by the commissioner by rule under sub. (5m).
AB920-engrossed,6,1714 8. Specify in an agreement among the employers in the employer group or in
15the by-laws of the employer group the procedures to be followed by and
16responsibilities of the involved parties in the event of insolvency or pending
17insolvency of the employer group.
AB920-engrossed,6,2418 (b) An employer group qualified under sub. (2) (b) may specify minimum
19participation requirements that an employer is required to satisfy to participate in
20the employer group. Except as provided under sub. (4) (b), an employer group
21qualified under sub. (2) (b) shall allow any employer that is a member of the same
22chamber of commerce or industry-based association as the other group members and
23that agrees to comply with the participation requirements specified under this
24paragraph to participate in the employer group.
AB920-engrossed,7,7
1(c) If an employer group qualified under sub. (2) (b) seeks to contract with a
23rd-party administrator to administer any part of the health care benefit
3arrangement, the employer group shall contract with a 3rd-party administrator that
4is registered to do business in this state. A contract between an employer group and
5a 3rd-party administrator that relates to the administration of the payment of
6claims shall specify terms for the resolution of claims upon termination of the
7contract with that 3rd-party administrator.
AB920-engrossed,7,9 8(4) Employer requirements. (a) An employer group qualified under sub. (2)
9(b) shall require each of its participating employers to do all of the following:
AB920-engrossed,7,1210 1. Offer the same health care benefits, or health care benefit arrangements
11with a de minimis difference in actuarial value, to all of the employer's eligible
12employees and all of the eligible employees' dependents.
AB920-engrossed,7,1713 2. Participate for at least the minimum participation period specified by the
14employer group under sub. (3) (a) 6. An employer group may require employers that
15desire to participate in the employer group to pay an amount that is forfeited to the
16employer group if the employer's participation terminates voluntarily or
17involuntarily before the employer's minimum participation period ends.
AB920-engrossed,7,2118 (b) Subject to any policy created by the employer group regarding late
19payments, an employer group qualified under sub. (2) (b) shall terminate an
20employer's participation in the employer group if the employer fails to pay a
21contribution required by the employer group under sub. (3) (a) 5.
AB920-engrossed,7,2422 (c) An employer group qualified under sub. (2) (b) shall hold an employer whose
23participation in the employer group terminates voluntarily or involuntarily
24responsible for all of the following:
AB920-engrossed,8,2
11. Any contribution amounts required during the employer's period of
2participation.
AB920-engrossed,8,53 2. The employer's proportionate share of the cost of any claims payable by the
4employer group that were incurred before the termination of the employer's
5participation.
AB920-engrossed,8,10 6(5) Covered benefits; payment of claims. (a) An employer group may provide
7a choice of health care benefit plans to employers but each employer that participates
8in the employer group shall offer the same health care benefits, or health care
9arrangement with a de minimis difference in actuarial value, to all employees and
10dependents of the employer.
AB920-engrossed,8,1911 (am) 1. An employer group qualified under sub. (2) (b) may not exclude coverage
12under a health care benefit arrangement for diagnosis and treatment of a condition
13or complaint by a licensed chiropractor within the scope of the chiropractor's
14professional license if the health care benefit arrangement covers diagnosis and
15treatment of a condition or complaint by a licensed physician or osteopath, even if
16different nomenclature is used to describe the condition or complaint. The health
17care benefit arrangement may not require examination by or referral from a
18physician before allowing coverage of chiropractic care under this paragraph. This
19paragraph does not prohibit any of the following:
AB920-engrossed,8,2220 a. Application of deductibles or coinsurance under the health care benefit
21arrangement to chiropractic care if deductibles or coinsurance apply equally to
22physician care.
AB920-engrossed,8,2523 b. Application of cost containment or quality assurance measures to
24chiropractic services in a manner that is consistent with cost containment or quality
25assurance measures applied to physician services.
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