PPO Law May Violate ERISA
Thanks to the Self-Insurance Institute of America, Inc. (SIIA) for bringing this news to our attention. It seems that a “model law” has been drafted by the National Conference of Insurance Legislators, with the purpose of ratification by member States in mind.
The law addresses concerns over PPO rental networks; situations where PPO networks negotiate discounts with non-payer, third party entities (such as third party administrators).
The problem is that this law proposes restrictions on benefit plans that may come within the purview of ERISA, and as such, would be preempted by those plans’ right to administer a uniform plan nationwide, under Federal jurisdiction.
Whether this proposal will become law in any State, and whether such law will have an effect on any self-funded Plan is yet to be seen. We will watch the matter as it develops.