In legislation recently passed by the state Legislature, “bona fide” employer-membership associations as of July 1 may choose to offer a new, partially self-funded health plan previously restricted in Kansas.
The new legislation offers Kansas associations with employer memberships a substantial health care advantage. Because the self-funded plans fall under federal ERISA laws and not the Kansas Insurance Department, plans avoid State insurance reserve, contribution and other requirements applicable to traditional insurance companies.
“As a partially self-funded pool under the new legislation, Kansas associations and their employer members can enjoy insurance coverage at rates substantially below those of regulated insurance companies,” said Mike Minton, vice president with Benefit Management Inc. (BMI), the leading Kansas-based administrator of partially self-funded health plans.
The plans are compliant with the Affordable Care Act, but are not required to cover additional State of Kansas mandated benefits.
Associations must qualify to offer these plans. They must be “bona fide” as a qualified trade, merchant, retail or professional association based in Kansas. They must also have been established for a minimum of five years and have five or more employers in the group.
Typical associations found throughout the state have employer memberships comprised of contractors, banks, law firms, hospitals, independent businesses and many others.
“These new plans are an attractive alternative for businesses finding it difficult to obtain affordable health care for their employees, said Chad Somers, president of BMI. “It constitutes a significant new benefit offered only through the Associations.”
However, implementing these plans requires proper design, consultation and administration.
“These plans offer opportunities because they are not subject to some of the common regulations,” said Somers. “This feature can be a liability and have consequences if Associations do not have the appropriate expertise in establishing and administering the plans. We at BMI like to treat these plans as regulated products and work side-by-side with our customers to achieve the best outcomes over the long-term.”
The legislation is covered within Senate Bill 309 that has been approved by the Kansas Legislature and signed into law by the governor.
The law becomes effective July 1, 2014.
For more information, visit http://bmikansas.com.
About Benefit
Management Inc. (BMI)
Benefit Management Inc., located in Great Bend, with offices in Wichita, provides customized, high-quality health benefits administration programs to partially self-insured companies, association plans and to state and federal high risk pools nationwide. Founded in 1995, BMI has become one of the Midwest’s leading third party administrators (TPAs) and is the leading independent self-funded TPA in Kansas, with benefits for 75,000 lives nationwide.
Self-insured clients range from small employers with a single location to national employers with multiple work sites across the country.