Private Health Insurance: Unauthorized or Bogus Entities Have Exploited Employers and Individuals Seeking Affordable Coverage Page: 6 of 22
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States regulate the insurance products that many employers and
individuals purchase. Each state's insurance department enforces the
state's insurance statutes and rules. Among the functions state insurance
departments typically perform are licensing insurance companies,
managed care plans, and the agents who sell their products; regulating
insurers' financial operations to ensure that funds are adequate to pay
policyholders' claims; reviewing premium rates; reviewing and approving
policies and marketing materials to ensure that they are not vague and
misleading; and implementing various consumer protections, such as
assisting people who do not receive health benefits that are covered
through insurance products or by providing an appeals process for denied
The federal government regulates most private employer-sponsored
pension and welfare benefit plans (including health benefit plans) as
required by the Employee Retirement Income Security Act of 1974
(ERISA).' These plans include those provided by an employer, an
employee organization (such as a union), or multiple employers through a
multiple employer welfare arrangement (MEWA).7 DOL is primarily
responsible for administering Title I of ERISA. Among other requirements,
ERISA establishes plan reporting and disclosure requirements and sets
fiduciary standards for the persons who manage and administer the plans.8
These requirements generally apply to all ERISA-covered employer
sponsored health plans, but certain requirements vary depending on the
size of the employer or whether the coverage provided is through an
insurance policy or a self-funded plan where the employer assumes the
risk associated with paying directly for at least some of their employees'
health care costs. In addition, ERISA generally preempts states from
directly regulating employer-sponsored health plans (although maintaining
5State insurance regulators established NAIC to help promote effective insurance
regulation, to encourage uniformity in approaches to regulation, and to help coordinate
states' activities. Among other things, NAIC develops model laws and regulations to assist
states in formulating their policies to regulate insurance.
'Pub. L. No. 93-406, 88 Stat. 829.
7MEWAs are plans or other arrangements that provide health and welfare benefits to the
employees of two or more employers. Under ERISA, MEWAs do not include certain plans
that the Secretary of Labor finds are collective bargaining agreements, or plans established
or maintained by a rural electric cooperative or a rural telephone cooperative association.
8Under ERISA, a fiduciary generally is any person who exercises discretionary authority or
control respecting the management or administration of an employee benefit plan or the
management or disposition of the plan's assets.
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United States. General Accounting Office. Private Health Insurance: Unauthorized or Bogus Entities Have Exploited Employers and Individuals Seeking Affordable Coverage, text, March 3, 2004; Washington D.C.. (digital.library.unt.edu/ark:/67531/metadc294100/m1/6/: accessed December 13, 2018), University of North Texas Libraries, Digital Library, digital.library.unt.edu; crediting UNT Libraries Government Documents Department.