PIERRE, S.D. – A bill that modernizes the South Dakota statute pertaining to Multiple Employer Trusts (Association Health Benefits) has passed through the State Senate Commerce and Energy Committee with a 6–0 vote.
The legislation has the backing of the Credit Union Association of the Dakotas (CUAD).
According to the CUAD, since the Affordable Care Act went into effect, employers in the small group health insurance market, generally employers with 50 employees or fewer, have faced rising costs and limited coverage options, with many South Dakota credit unions reporting double-digit premium increases in recent years.
“One strategy utilized by groups to get around the ACA's small group market rules is to band together in an employer group or association to collectively be treated as one large employer sponsor of a health plan, known as association health plans,” noted the CUAD.
The Credit Union Association of the Dakotas operates a Multiple Employer Welfare Arrangement (MEWA), which the U.S. Department of Labor refers to as “Small Business Health Plans” or “Association Health Plans.”
Credit Union Association of the Dakotas President/CEO, Jeff Olson testified before the committee in Pierre in support of the bill.
‘Cost-Saving Alternative’
“Many small employers, like most of our credit unions in the state, are struggling to offer affordable insurance benefits to their employees,” stated Olson. “With this bill, and the suggested amendments to the statute, there will be a cost saving alternative for our credit unions and other smaller employers in the state to offer high quality, and affordable health insurance benefits to employees through Self-Funded Multiple Employer Trusts such as ours.”
According to the CUAD, in his testimony Olson also highlighted a section of the bill that he indicated is beneficial to South Dakota credit unions and which provides CUAD Health Benefits Trust and others like it the opportunity to request a waiver from the Director of Insurance.
“Meaning, if our Credit Union Health Benefits Trust provides evidence that we are compliant with, and meets all the South Dakota financial requirements in statute, as well as those in statute in North Dakota, the Director can grant us the authority to offer our program to our affiliated credit unions and employees in South Dakota,” Olson said. “Again, providing we meet all the requirements in the South Dakota Statute."
Current Prohibition
The CUAD Health Benefits Trust cannot be offered to South Dakota credit unions under the current statute, the CUAD said. The CUAD HBT is a $5.5-million health benefits trust, currently has 20 North Dakota credit unions participating, and offers health insurance to over 1,100 credit union employees and their families in North Dakota, according to the association.
“This is great news for our South Dakota credit unions who have been experiencing steep annual increases in their health care premiums,” says Olson. “Changes proposed under SB 37 will make it easier for small employers in South Dakota to join a Self-Funded Multiple Employer Trust and to offer affordable health insurance benefits to their employees.”