Source: http://govpulse.us/entries/2011/12/13/2011-31864/patient-protection-and-affordable-care-act-establishment-of-consumer-operated-and-oriented-plan-co-o
Timestamp: 2014-09-30 17:52:49
Document Index: 760912585

Matched Legal Cases: ['§ 156', '§ 156', '§ 156', '§ 156', '§ 156', 'art 156', '§ 156', '§ 156', '§ 156', '§ 156', '§ 156', '§ 156', '§ 156', '§ 156']

govpulse | Patient Protection and Affordable Care Act; Establishment of Consumer Operated and Oriented Plan (CO-OP) Program
Patient Protection and Affordable Care Act; Establishment of Consumer Operated and Oriented Plan (CO-OP) Program
This final rule implements the Consumer Operated and Oriented Plan (CO-OP) program, which provides loans to foster the creation of consumer-governed, private, nonprofit health insurance issuers to offer qualified health plans in the Affordable Insurance Exchanges (Exchanges). The goal of this program is to create a new CO-OP in every State in order to expand the number of health plans available in the Exchanges with a focus on integrated care and greater plan accountability.
A. Overview of the Consumer Operated and Oriented Plan (CO-OP) Program
B. Statutory Basis for the Consumer Operated and Oriented Plan (CO-OP) Program
C. Structure of the Final Rule
II. Summary of the Proposed Provisions and Responses to Comments on the CO-OP Proposed Regulation
A. Basis and Scope (§ 156.500)
B. Definitions (§ 156.505)
C. Eligibility (§ 156.510)
D. CO-OP Standards (§ 156.515)
2. Governance Requirements
3. Requirements To Issue Health Plans and Become a CO-OP
E. Loan Terms (§ 156.520)
1. Overview of Loans
2. Repayment Period
5. Deeming of CO-OP Qualified Health Plans
F. Comments Beyond the Scope of the Final Rule
IV. Regulatory Impact Analysis (RIA)
B. Summary and Need for Regulatory Action
V. Other Requirements for Analysis of Economic Effects
Table 1—Accounting Statement: Classification of Estimated Costs and Savings
Meghan Elrington, (301) 492-4388 for general issues and issues related to loan terms and governance standards.
Anne Bollinger, (301) 492-4395 for issues related to definitions and eligibility.
Ilana Cohen, (301) 492-4371 for issues related to CO-OP standards.
The Patient Protection and Affordable Care Act, (Pub. L. 111-148), enacted on March 23, 2010, and the Health Care and Education Reconciliation Act of 2010 (Pub. L. 111-152), enacted on March 30, 2010, are collectively referred to in this final rule as the “Affordable Care Act.” The Department of Defense and Full-Year Continuing Appropriations Act, 2011 (Pub. L. 112-10), which amended Section 1322 of the Affordable Care Act, was enacted on April 15, 2011. Section 1322 of the Affordable Care Act created the Consumer Operated and Oriented Plan program (CO-OP) to foster the creation of new consumer-governed, private, nonprofit health insurance issuers. In addition to improving consumer choice and plan accountability, the CO-OP program also seeks to promote integrated models of care and enhance competition in the Affordable Insurance Exchanges (Exchanges) established under the Affordable Care Act.
The statute authorizes the Secretary to make loans to capitalize eligible prospective CO-OPs with a goal of having at least one CO-OP in each State. It also permits the funding of multiple CO-OPs in any State, provided that there is sufficient funding to capitalize at least one CO-OP in each State. There is $3.8 billion in appropriations for the program.
All CO-OP loans must be repaid with interest, and loans will only be made to private, nonprofit entities that demonstrate a high probability of becoming financially viable. The CO-OP program contains extensive provisions to protect against fraud, waste, and abuse. Loan recipients are subject to strict monitoring, audits, and reporting requirements for the length of the loan repayment period plus 10 years and CO-OPs must meet a series of milestones before drawing down disbursements, as described in their loan agreements.
This final rule—(1) Sets forth the eligibility standards for the CO-OP program; (2) establishes terms for loans; and (3) provides basic standards that organizations must meet to participate in this program and become a CO-OP. This rule is intended to provide flexibility for eligible organizations to encourage diversity in the organizational design and approach while ensuring that the statutory goals are met.
Starting in 2014, individuals and small businesses will be able to purchase private health insurance through State-based competitive marketplaces called Affordable Insurance Exchanges (Exchanges). Insurance companies will compete for new business on the basis of price and value and consumers will have a choice of health plans to fit their needs. The Departments of Health and Human Services, Labor, and the Treasury (the Departments) are seeking public input, providing guidance, and issuing regulations implementing Exchanges in several phases. A Request for Comment relating to Exchanges was published in the Federal Register on August 3, 2010. Initial Guidance to States on Exchanges was published on November 18, 2010. A proposed rule for the application, review, and reporting process for waivers for State innovation was published in the Federal Register on March 14, 2011 (76 FR 13553). On July 15, 2011, two proposed regulations werepublished in the Federal Register to implement components of the Exchange: “Establishment of Exchanges and Qualified Health Plans” and “Standards Related to Reinsurance, Risk Corridors and Risk Adjustment.” On August 17, 2011, three proposed regulations were published in the Federal Register: “Eligibility Changes Under the Affordable Care Act of 2010,” “Exchange Functions in the Individual Market: Eligibility Determinations; Exchange Standards for Employers,” and “Health Insurance Premium Tax Credit.” Additional regulations will be published in the Federal Register to implement Exchange related components of the Affordable Care Act.
II. Summary of the Proposed Provisions and Responses to Comments on the CO-OP Proposed Rule
Acronym List ↑
Because of the many terms to which we refer by acronym in this final rule, we are listing the acronyms used and their corresponding meanings in alphabetical order below:
CCIIOCenter for Consumer Information & Insurance Oversight
CO-OPConsumer Operated and Oriented Plan
ERISAEmployee Retirement Income Security Act
FACAFederal Advisory Committee Act
FOAFunding Opportunity Announcement
FQHCFederally Qualified Health Center
RFCRequest for Comment
A. Overview of the Consumer Operated and Oriented Plan (CO-OP) Program ↑
Section 1322 of the Affordable Care Act directs the Secretary to establish the CO-OP program to provide loans to foster the creation of new consumer-governed nonprofit health insurance issuers, referred to as CO-OPs, in every State. These new consumer-run, private, nonprofit insurers will be one vehicle for providing higher quality care that is affordable and uses innovative care models in the Exchanges starting in 2014.
The statute divides the CO-OP loans into two types: loans for start-up costs, to be repaid in 5 years (“Start-up Loans”), and loans to enable CO-OPs to meet State insurance solvency and reserve requirements, to be repaid in 15 years (“Solvency Loans”). Section 1322(b)(2)(A) of the Affordable Care Act directs CMS to ensure that there is sufficient funding to establish at least one CO-OP in each State and to give priority to organizations that can offer these CO-OP qualified health plans on a Statewide basis, provide integrated care, and have significant private support. Section 1301(a)(2) of the statute deems CO-OP qualified health plans offered by a qualified nonprofit health insurance issuer eligible to participate in the Exchanges. By creating more health plan choices, the CO-OP program can benefit all consumers.
The CO-OP program also seeks to promote improved models of care. Existing health insurance cooperatives and other business cooperatives provide possible models for the successful development of CO-OPs around the country. One major barrier to continued development of this model in the health insurance market has been the difficulty of obtaining adequate capitalization for start-up costs and State insurance reserve requirements. The CO-OP program is designed to help overcome this barrier to new issuer formation by providing loans specifically for these critical activities.
Pursuant to section 1322(b)(4) of the Affordable Care Act, the Comptroller General announced the appointment of a 15 member CO-OP Program Advisory Board on June 23, 2010 to make recommendations to CMS on awarding loans. Section 1322(b)(2)(A) directs the Secretary to consider the recommendations of this Advisory Board when awarding loans under the CO-OP program. After taking testimony from experts and comments in 3 day-long public hearings from January through March 2011 and examining written comments, the Advisory Board approved its final recommendations and submitted its public report on April 15, 2011. This final report is available at:http://cciio.hhs.gov/resources/files/coop_faca_finalreport_04152011.pdf. The Advisory Board generally advised the Department to develop flexible criteria that recognize the diversity of market conditions around the country to enable the development of various CO-OP models and allow different types of sponsorship. It also encouraged the Department to provide technical assistance at all stages of the process in order to enhance the viability of individual CO-OPs and the success of the program.
The Advisory Board recommended four major principles for awarding loans. CMS concurs with these principles:
(1) Consumer operation, control, and focus must be the salient features of the CO-OP and must be sustained over time;
(2) Solvency and the financial stability of coverage should be maintained and promoted;
(3) CO-OPs should encourage care coordination, quality and efficiency to the extent feasible in local provider and health plan markets; and
(4) Initial loans should be rolled out as expeditiously as possible so that CO-OPs can compete in the Exchanges in the critical first open enrollment period.
This final rule and the Funding Opportunity Announcement (FOA) for the CO-OP program incorporate these four principles endorsed by the Advisory Board.
On February 2, 2011, CMS published a Request for Comment (RFC) in the Federal Register(76 FR 5774) seeking public comment on the rules that will govern the CO-OP program. The public comments received in response to the RFC were considered in the development of the proposed rule published in the Federal Register on July 20, 2011 with a comment period that ended on September 16, 2011 (76FR 43237). In addition, a Funding Opportunity Announcement (FOA) for the CO-OP program, available at www.grants.gov(CFDA Number 93.545), was published on July 28, 2011 (and amended on September 16, 2011) and provides detailed information regarding the application and award administration process for the CO-OP program.
B. Statutory Basis for the Consumer Operated and Oriented Plan (CO-OP) Program ↑
Section 1322(a) of the Affordable Care Act directs CMS to establish the CO-OP program to foster the creation of member-governed qualified nonprofit health insurance issuers to offer CO-OP qualified health plans in the individual and small group markets in the States in which they are licensed.
Section 1322(b)(1) of the Affordable Care Act directs CMS to make two types of loans available to organizations applying to become qualified nonprofit health insurance issuers: Start-up Loans and repayable grants (Solvency Loans). Start-up Loans will provide assistance with start-up costs and Solvency Loans will provide assistance in meeting solvency requirements of State regulators in the States in which the organization is licensed to issue CO-OP qualified health plans. Although the statute refers to Solvency Loans as “grants,” they are loans because they must be repaid.
Section 1322(b)(2) provides that in making awards, CMS must take into account the recommendations of the Advisory Board further described in section 1322(b)(4) and give priority to applicants that offer CO-OP qualified health plans on a Statewide basis, use integrated care models, and have significant private support.
Section 1322(b)(2) also directs CMS to ensure that there is sufficient funding to establish at least one qualified nonprofit health insurance issuer in each State and the District of Columbia. It permits CMS to fund additional qualified nonprofit health insurance issuers in any State if the funding is sufficient to do so. If no entities in a State apply, CMS may use funds to encourage the establishment of a qualified nonprofit health insurance issuer in the State or the expansion of another qualified nonprofit health insurance issuer from another State to that State.
Section 1322(b)(2) also directs any organization receiving a loan to enter into an agreement to meet the standards to become a qualified nonprofit health insurance issuer and any other terms and conditions of the loan awards. Under section 1322(b)(2)(C)(ii), the agreement must provide that no portion of the loans be used for propaganda purposes, attempts to influence legislation, or marketing.
Section 1322(b)(2)(C)(iii) provides that, if CMS determines that an organization has failed to meet any provisions of the loan agreement or failed to correct such failure within a reasonable period of time, the organization must repay an amount equal to the sum of:
• 110 percent of the aggregate amount of loans received; plus
• Interest on the aggregate amount of loans for the period the loans were outstanding starting from the date of drawdown.
CMS must notify the Department of the Treasury of any determination of a failure to comply with the CO-OP program standards (including the provisions of a loan agreement) that may affect an issuer's tax-exempt status under section 501(c)(29) of the Internal Revenue Code of 1986 (the Code).
Under section 1322(b)(3), Start-up Loans must be repaid within 5 years, and Solvency Loans must be repaid within 15 years. Repayment terms in the award of loans must take into consideration any appropriate State reserve requirements, solvency regulations, and requisite surplus note arrangements that must be constructed by a qualified health insurance issuer in a State to receive and maintain licensure. Section 1322(b)(3) provides that, not later than July 1, 2013 and prior to awarding loans, CMS must promulgate these regulations, “with respect to the repayment” of the loans. Legal obligations regarding repayment as well as other obligations required for program compliance will be included in loan agreements.
Section 1322(c)(1) defines “qualified nonprofit health insurance issuer” as an organization that:
• Is organized under State law as a private, nonprofit, member corporation;
• Conducts activities of which substantially all consist of the issuance of CO-OP qualified health plans in the individual and small group markets in each State in which it is licensed to issue such plans; and
• Meets the other requirements in subsection 1322(c).
Section 1322(c)(2) states that an organization is not eligible to become a qualified nonprofit health insurance issuer if the organization or a related entity (or any predecessor of either) was a health insurance issuer on July 16, 2009. In addition, an organization cannot be treated as eligible to apply for a loan under the CO-OP program if a State or local government, any political subdivision thereof, or any instrumentality of such government or political subdivision sponsors it.
Section 1322(c)(3) establishes governance requirements for a qualified nonprofit health insurance issuer. To ensure consumer control, the governance of the organization must be subject to a majority vote of its members. The organization's governing documents must incorporate ethics and conflict of interest standards to protect CO-OP members against insurance industry involvement and interference. To ensure consumer orientation, the organization is required to operate with a strong consumer focus, including timeliness, responsiveness, and accountability to members.
Section 1322(c)(4) directs the organization to use any profits to lower premiums, improve benefits, or for other programs intended to improve the quality of health care delivered to its members.
Section 1322(c)(5) states that the organization must meet all the State standards for licensure that other issuers of qualified health plans must meet in any State where the issuer offers a CO-OP qualified health plan, including solvency and licensure requirements and any other State law described in section 1324(b).
Section 1322(c)(6) prohibits a qualified nonprofit health insurance issuer from offering a health plan in a State until that State has in effect (or CMS has implemented for the State) the market reforms outlined in part A of title XXVII of the Public Health Service Act (as amended by subtitles A and C of title I of the Affordable Care Act).
Section 1322(d) enables qualified nonprofit health insurance issuers to establish a private purchasing council to enter into collective purchasing arrangements for items and services that increase administrative and other cost efficiencies including claims administration, administrative services, health information technology, and actuarial services. The private purchasing council is prohibited from setting payment rates for health care facilities or providers that contract with qualified nonprofit health insurance issuers.
Section 1322(e) prohibits representatives of any Federal, State, or local government (or of any political subdivision or instrumentality thereof), and representatives of an organization that was an existing issuer or a related entity (or predecessor of either) on July 16, 2009, from serving on the board of directors of the qualified nonprofit health insurance issuer or a privatepurchasing council established under section 1322(d).
Together, these provisions form the statutory basis for the CO-OP program established under this rule.
C. Structure of the Final Rule ↑
The regulations outlined in this final rule will be codified in 45 CFR part 156 subpart F. The major subjects covered in this final rule are described below.
• Section 156.500 describes the statutory basis of the CO-OP program and the scope of this proposed rule;
• Section 156.505 sets forth definitions for the terms applied in subpart F;
• Section 156.510 specifies the criteria to be eligible for a loan under the CO-OP program;
• Section 156.515 sets forth the standards for a CO-OP; and
• Section 156.520 sets forth the terms for loans awarded under the CO-OP program including repayment terms and interest rates.
II. Summary of the Proposed Provisions and Responses to Comments on the CO-OP Proposed Regulation ↑
The proposed rule was published in the Federal Register on July 20, 2011 with a comment period that ended on September 16, 2011 (76 FR 43237). In addition, a Funding Opportunity Announcement for the CO-OP program, available at http://www.grants.gov(CFDA Number 93.545), was published on July 28, 2011 (and amended on September 16, 2011) and provides detailed information regarding the application and award administration process for the CO-OP program. We received approximately 45 public comments that addressed many topics in the proposed rule. Interested parties that submitted comments included private citizens, organizations interested in applying to the CO-OP program, State Departments of Insurance, health insurance issuer trade associations, medical associations, provider and hospital associations, and advocacy groups. In this preamble we provide a summary of each proposed provision, a summary of the public comments received, our responses to them, and any changes to the CO-OP program that we are implementing in the final regulation as a result of comments received. At the end of the comment and response sections of this preamble, we also reference comments we received that were outside the scope of the provisions set forth in the proposed rule. Several of these comments pertain to the provisions of the Funding Opportunity Announcement and will be addressed in program guidance or in loan agreements. Loan recipients will be subject to legal obligations outlined in the loan agreements. Those obligations are not reiterated here.
A. Basis and Scope (§ 156.500) ↑
Section 156.500 specifies the general statutory authority for and scope of standards proposed in subpart F. The CO-OP program awards loans to foster the creation of qualified nonprofit health insurance issuers to offer CO-OP qualified health plans in the individual and small group markets. Subpart F establishes certain eligibility, governance, and health plan issuance standards for CO-OPs as well as certain terms for loans awarded under the CO-OP program. Applicants may apply for loans to help fund start-up costs and meet the solvency requirements of States in which the applicant seeks to be licensed to issue a CO-OP qualified health plan.
Comment: One commenter opposed implementation of the CO-OP program and indicated that no government loan program can bring meaningful resolution to the lack of consumer choice in the health insurance market. The commenter stated that the likelihood of failure will be higher for these start-up organizations than it otherwise would be in the market because the organizations with the best prospects of being able to repay loans, pre-existing health insurance issuers, are excluded from the CO-OP program. The commenter recommended that CMS delay awarding loans. Another commenter expressed concern that the funding appropriated for the CO-OP program will be reduced by the Congress.
Response: We recognize that loan recipients will face challenges entering highly concentrated health insurance markets. This is true for any new market entrant. However, the CO-OP program is responsive to these barriers. The CO-OP program offers resources, in the form of loans, to responsibly capitalize new, private, consumer-oriented issuers by increasing the availability of adequate reserve funding and boosting the ability of CO-OPs to compete in a brand new, broader insurance marketplace. Insurance markets will change and expand considerably in 2014 with the implementation of Exchanges. In order to obtain a loan and be successful, CO-OPs must demonstrate the ability to gain sufficient enrollment and revenue to sustain their organization. Therefore, it is important that CMS begin awarding loans consistent with current law and the Advisory Board's recommendation to give loan recipients sufficient time to become operational and begin accepting enrollment during the first Exchange open enrollment period in the Fall of 2013.
We have considered the comments received regarding the basis and scope of the CO-OP program and are finalizing the provisions of § 156.500 as proposed.
B. Definitions (§ 156.505) ↑
Section 156.505 sets forth definitions for terms that are used throughout subpart F and are not intended to apply to other subparts of section 156. Many of the definitions presented in § 156.505 of the proposed rule were taken directly from the Affordable Care Act, but new definitions were created when necessary. Some of the definitions presented in § 156.505 of the proposed rule have since been revised based on the comments received, including: “qualified nonprofit health insurance issuer,” “related entity,” and “sponsor.” We originally proposed that a “qualified nonprofit health insurance issuer” be defined as a loan recipient that satisfies or can reasonably be expected to satisfy the standards in section 1322(c) of the Affordable Care Act and § 156.515 within the time frames specified in this subpart, until such time as CMS determines the loan recipient does not satisfy or cannot reasonably be expected to satisfy these standards. Generally, an entity that has received a loan and has met program requirements for the loan is reasonably expected to satisfy these standards. This definition was proposed to ensure that loan recipients can receive the benefits of section 1322(h), addressing the Federal income tax exemption for qualified nonprofit health insurance issuers, at the appropriate time as determined by the Internal Revenue Service.
We proposed the definition of “related entity” be an organization that shares common ownership or control with a pre-existing issuer or a trade association whose members consist of pre-existing issuers, and satisfies at least one of the following conditions: (1) Retains responsibilities for the services to be provided by the issuer; (2) furnishes services to the issuer's enrollees under an oral or written agreement; or (3) performs some of the issuer's management functions under contract or delegation. Thus, CMS proposed permitting a nonprofit organization that is not an issuer or the representative of an issuer but shares control with an existing issuer to “sponsor” or facilitate the creation of a CO-OP if the applicant (and resulting CO-OP) and the existing issuer do not share the same chief executive or any of the board of directors. In the proposedrule, “sponsor” was defined as an organization or individual that is involved in the development, creation, or organization of the CO-OP or provides financial support to a CO-OP. The comments we received on these proposed definitions and our responses are provided below.
Comment: Several commenters requested that the definition of “qualified nonprofit health insurance issuer” be revised so that qualified nonprofit health insurance issuers may access multiple forms of investment and philanthropic capital (including debt, equity or equity-equivalent, grants, bonds, etc.) in a manner that does not compromise their primary commitment to mission.
Response: Although other legal requirements, including state nonprofit corporation laws and tax rules applicable to tax-exempt grantors and CO-OPs seeking tax-exempt status, may limit the availability to CO-OPs of certain kinds of investments, section 1322 of the Affordable Care Act and the proposed definition of a “qualified nonprofit health insurance issuer” do not impose limitations on the capital that may be invested in a “qualified nonprofit health insurance issuer.” However, the organization's surplus funds (that is, revenue in excess of expenses) must be “used to lower premiums, to improve benefits, or for other programs intended to improve the quality of health care delivered to its members.” In addition, as stated in the FOA and recommended by the Advisory Board, CO-OPs may also use their surplus funds to conduct marketing, repay loans awarded under the CO-OP program, meet State solvency requirements, and provide for enrollment growth, financial stability, and stable coverage for its members. The proposed rule does not prohibit but encourages private investment that can be demonstrated to meet this standard on the application of profits. Therefore, it is not necessary to revise the definition of “qualified nonprofit health insurance issuer” to allow CO-OPs to access investment. Other legal requirements applicable to investments in CO-OPs are outside the scope of this rulemaking.
However, in the definition of “qualified nonprofit health insurance issuer,” we have replaced the phrase “loan recipient” with the word “entity.” Because only a loan recipient can satisfy the standards in section 1322(c) and § 156.515, we do not view this as a substantive change from the proposed rule. It is being made to ensure flexibility in determining when entities qualify for the Federal income tax exemption.
Comment: Several commenters requested that the definition of “member” be revised to include only those covered lives who are at least 18 years old.
Response: We agree that voting rights should be limited to covered lives who are at least 18 years old, and we have revised § 156.515 accordingly. However, this change to the proposed rule does not necessitate a revision to the definition of member, and we are finalizing the definition as proposed.
Comment: Several commenters requested clarification on whether the definition of “member” includes dependents, and some commenters requested that the definition of “member” be limited to one adult covered life within each family plan.
Response: The term “member” includes all individuals covered under health insurance policies issued by a loan recipient, including dependents. As discussed above, we have also limited voting rights to members over 18 years old. We understand the commenter's concern that allowing adult dependents in family coverage to vote will create an imbalance in the representation of different member interests on the board. However, the statute provides no basis for discriminating among covered lives on the basis of the source of coverage. The limitation proposed by the commenter would prevent certain adults receiving health care coverage under a CO-OP from participating in the organization's governance. As indicated in the testimony from existing health insurance cooperatives, all adults in existing health insurance cooperatives have voting privileges regardless of family or employment status. Therefore, we have concluded that every adult covered by the CO-OP must be eligible to vote and serve on the board of directors in order to ensure that decisions are made in the best interest of all covered lives consistent with both the statute and the traditional model of a cooperative.
Comment: Several commenters requested clarification as to what the term “representative” means.
Response: We understand the need for clarification of this term and have included a definition of “representative” in this final rule. “Representative” means an individual who stands or acts for an organization or group of organizations through a formal agreement or financial compensation such as a contractor, broker, official, or employee.
Comment: Due to the statutory prohibition on the use of loan funding for “marketing,” several commenters requested guidance as to what activities are considered “marketing.” Several commenters indicated that the description in the FOA released on July 28, 2011 that described marketing as “activities that promote the purchase of a specific health care plan or explain a product's benefit structure, whether targeted at new or current members” is overly broad, prohibiting CO-OPs from using loan funds to educate their members. In the Request for Comment (RFC), several commenters recommended that CMS define “marketing” narrowly to allow loan recipients to use loan funds to conduct community outreach and member education.
Response: Marketing was not discussed in the proposed rule and therefore, is outside the scope of this rule. Please see the amended FOA, released on September 16, 2011, for additional guidance regarding the activities included in the term marketing.
Comment: Several commenters supported the proposed definition of “issuer” because it prohibits insurance companies that were in existence prior to July 16, 2009, from participating in the CO-OP program. One commenter requested that reinsurers be categorized as a qualified sponsor under the term “issuer.”
Response: The intent of the proposed definition was to prohibit any insurance companies that were in existence prior to July 16, 2009, from participating in the CO-OP program, consistent with the statutory directive. Reinsurers are typically licensed as issuers under State law, and therefore are generally captured under the definition of “issuer.”
Comment: One commenter requested that multiple employee welfare arrangements (MEWAs) and their affiliates be included within the class of entities that are excluded from the definition of “issuer.”
Response: MEWAs and their affiliates are typically not licensed by States as “issuers” and, therefore, would appear to be eligible for loans if they meet all other eligibility criteria. The definition of “issuer” clearly states that an entity is an “issuer” if it is “licensed to engage in the business of insurance in a State and which is subject to State law which regulates insurance.” Consistent with the statute, if a M