To:         All Health Insurers

From:     Doug Ommen, Director

Re:         HB 818 (2007) implementation delays

Date:      December 3, 2007

After discussions with representatives of several federal agencies, the Department of Insurance, Financial Institutions and Professional Registration (DIFP) has concluded that implementation of certain portions of HB 818 (2007) may conflict with some federal regulations.  Impacted provisions include regulations under the Employee Retirement and Income Security Act of 1974 (ERISA), Internal Revenue Code provisions and Health Insurance Portability and Accountability Act of 1996 (HIPAA).  Should DIFP be unable to resolve these conflicts, certain interpretations of federal law have the potential to create legal and financial problems for insurers, employers and employees regarding noncompliance with the federal laws. 

Conflicts related to retention of individually underwritten health insurance contracts by eligible employees of small employers, with the small employer making contributions for those plans, seem to be the most problematic.  (§379.940.2(3)(c) RSMo requires small employers to provide this option to their eligible employees).   

DIFP is working with the federal government in an effort to identify the areas of conflict and work toward a possible solution to the problems.  Until the conflicts are identified and resolved, DIFP will not be filing proposed rules to clarify the implementation of the insurance laws in HB 818 (2007), nor will the DIFP be taking steps to enforce some of the insurance obligations under HB 818(2007) with insurers.  Since a number of the requirements in HB 818(2007) are placed on employers rather than the insurers, DIFP believes it would problematic for employers to place themselves in a position, which may conflict with current interpretation of federal law in an effort to comply with Missouri state law.  There is no statutory or regulatory responsibility for insurers or producers to advise their clients of the potential risk, but it may be helpful to employers if insurance companies and producers make reasonable attempts to work with their clients to make them aware of the concerns. 

Areas of potential conflict with current federal interpretation we have identified at this time include:

  • §379.940.2(3)(c) RSMo:  Possible conflicts with ERISA, IRS and HIPAA discrimination laws.  ERISA and HIPAA guarantee issue requirements may also be impacted.
  • §§354.536.2, 376.426(17) and 376.776.3 RSMo:  Extension of dependent age is NOT problematic, and is being enforced, see Bulletin 07-06  Possible conflicts with IRS laws and ERISA depending on how coverage of emancipated dependents is paid and by whom. 
  • §376.453 RSMo:  Potential discrimination concerns with IRS laws, ERISA, and HIPAA depending on what is considered employer dollars when it runs through a 125 cafeteria POP plan.  (Federal law, 26 U.S.C. §125) and what type of insurance plan is being paid for by employer dollars (individual or group).