The Oregon Division of Financial Regulation (the “Division”) recently issued a bulletin clarifying Oregon law and guidance applicable to association health plans (“AHPs”), which are multiple employer welfare arrangements (“MEWAs”) under ERISA. In Bulletin No. DFR 2018-07 (the “Bulletin”), the Division declined to adopt the more flexible criteria established by the recent U.S. Department of Labor (“DOL”) final regulation on AHPs (the “AHP Rule”).

The AHP Rule modified the definition of “employer” under ERISA to provide new options for small businesses and working owners to join together and be treated as a single large employer sponsor of a group health plan. AHPs are attractive to small employers who can then purchase health insurance without the additional requirements imposed on small groups under the Affordable Care Act. The DOL claims the AHP Rule will expand access to and lower the cost of insurance policies for small businesses. Opponents, including states such as Oregon, say the rule will destabilize the individual and small group market, increase fraud and abuse, decrease comprehensive health coverage, and result in higher health insurance costs overall. Oregon joined a coalition of states in a lawsuit filed this summer challenging the AHP Rule.

The AHP Rule does not modify or otherwise limit state insurance law or authority to regulate MEWAs; it also explicitly preserves the DOL’s pre-rule guidance used to determine whether an association is “bona fide” and should be recognized as a single employer under ERISA.  Given Oregon’s position on the AHP Rule, it is not surprising that the Bulletin indicates the Division will continue to enforce Oregon’s pre-rule guidance (see  Bulletin INS 2013-3) without modification  on the type of associations and MEWAs that may purchase or issue a health plan in Oregon.

The Bulletin provides a helpful summary of how associations can comply with Oregon requirements while reminding insurers, associations, MEWAs, agents, and producers that the Division would take action “for any failure to comply with or attempt to circumvent Oregon statutory or regulatory requirements with respect to health benefit plan coverage offered by or to an association.”