SHCE - Association reclassification

[AliciaK-GHC]

We are in the process of breaking out our association business. We have several associations that have been certified as True Employer Associations (TEAs) by the State of Washington. The state reporting indicates that we should report this as Large Group. Would you agree that this should be reported as Large Group for SHCE/MLR reporting purposes? Also, all of our associations are in the process of obtaining certifications as TEAs. Would these be reported as large group or would we still need to break them out by line of business based on size?

[Glenn]

Hello Alisha,
In the case of you state reporting I would agree with treatment of the True Employer Association ( TEA) as Large Group but I would caution that this may not be the case for SHCE and MLR. I am going to copy in the instructions from the SHCE/MLR forms which are common in their definition of Associations. The excerpt from the instructions would say that Associations could be small or large group depending on the "size of the employer". Please note the excerpt below:

The allocation of premium and claims between jurisdictions should be based upon situs of the contract. For purpose of this exhibit, situs of the contract is defined as ?the jurisdiction in which the contract is issued or delivered as stated in the contract. For individual business sold through an association, the allocation shall be based on the issue state of the certificate of coverage. When the association is made up of employers, it should be reported as large group or small group depending on the size of each employer. For employer business issued through a group trust, the allocation shall be based on the location of each employer. For employer business issued through a multiple employer welfare association the allocation should be based on the location of each employer.

Also I am attaching a copy links that you should read with respect to this issue of the treatment of TEAs:

http://www.insurance.wa.gov/current-...lan/index.html

http://www.conniff.com/bona-fide-ass...e-the-filings/

http://healthaffairs.org/blog/2011/0...-health-plans/

The last link about ERISA is probably the best resource.

This being said we at Booke would not definitively say that all TEAs are large group. There appears that there could be some exceptions.

Regards,
Glenn S. Sackett