Delaware Administrative Code
Title 18 - Insurance
1400 - Health Insurance Specific Provisions
1405 - Requirements for Fully Insured Multiple Employer Welfare Arrangements and Association Health Plans
Section 1405-1.0 - Purpose
Current through Register Vol. 28, No. 3, September 1, 2024
1.1 The purpose of this regulation is to aid the Department of Insurance in enforcing provisions of the Delaware Insurance Code relating to the unauthorized transaction of insurance. As a result of the Final Rule issued by the U.S. Department of Labor expanding the definition of the term "employer" (see 83 FR 28,961 (to be codified at 29 CFR 2510.3-5(c)), the Department recognizes that multiple employer welfare arrangements, including association health plans, may begin marketing group policies in Delaware. These entities sell group health care coverage to employers. Employers operating small businesses may be particularly targeted. Because of rate increases imposed by licensed companies, or adverse experience in their group, many small employers have in the past been attracted by the purported low cost coverage offered by these entities.
1.2 Some of these entities incorrectly represent to their agents and applicants that they are exempt from state insurance regulation either because they are subject to the Federal Employee Retirement Income Security Act ("ERISA") or because they hold a policy issued outside the state. Exemption from Delaware Department of Insurance regulation is available under those circumstances if certain legal standards are met. This regulation also ensures that only those entities that meet the legal standards established by the Delaware Department of Insurance to issue policies in Delaware are permitted to operate in Delaware.
1.3 An additional purpose of this regulation is to set forth rules, forms, and procedures regarding fully insured MEWAs and association health plans. This regulation protects Delaware consumers and promotes the stability of Delaware's health insurance markets, to the extent permitted under federal law, by setting rules regarding licensure, solvency, reserve requirements, and rating requirements.
