STATE TARGETS SELF-INSURERS

OKLAHOMA CITY-Self-insured employers in Oklahoma that refuse to cooperate with state Insurance Department requests for information about their health care plans could become the targets of a U.S. Department of Labor investigation under a two-year pilot program agreed to last week by Oklahoma and federal officials.

Under the program-which is being viewed with concern by business groups-the Labor Department is authorizing the Oklahoma Insurance Department to directly follow up with employers after receiving requests for assistance on claims disputes from employees covered by self-insured plans.

If an employer refuses to comply, such as by not providing benefit plan documents to state officials, the Dallas regional office of the U.S. Office of Pension and Welfare Benefits Administration will write a letter to the employer confirming its agreement with the Oklahoma Insurance Department and requesting that the employer cooperate with the department.

If that fails, the PWBA, the federal benefits regulatory and enforcement agency, would consider opening an investigation and possibly issuing a subpoena to obtain the documents.

The PWBA could share this information with the Oklahoma Insurance Department if that would help the PWBA resolve issues initially raised with the Insurance Department, according to the agreement.

The agreement, announced last week by Oklahoma Insurance Commissioner John P. Crawford, is limited to employers with self-funded health care plans that are administered in Oklahoma. The state Insurance Department estimates the agreement could affect as many as 1,000 self-funded plans covering about 100,000 employees and dependents.

Commissioner Crawford hailed the agreement as pro-plan participant.

"Hopefully, we will be able to help more of our citizens. What this means to the average person is that they will now have a place to go locally with disputes with their self-insured companies over health care benefits," he said.

Labor Department officials also welcomed the agreement.

"This seems like a win-win-win situation," said PWBA Regional Administrator Bruce Ruud. "They (the Oklahoma Insurance Department) are giving us a hand," he added.

Commissioner Crawford said in 1995 he approached-with support from the Oklahoma congressional delegation-Labor Department officials for a pilot program to enable the department to help employees with claims disputes from employers with self-funded plans.

The commissioner said he was frustrated because when employees in self-funded plans had claims complaints, the department could not intervene, even to obtain basic plan information.

That is because under the Employee Retirement Income Security Act, states are pre-empted from regulating employee benefit programs. That authority rests with the federal government, principally the U.S. Department of Labor.

"We had no authority to help resolve problems, because by law, that has been the sole domain of a federal agency. So, when people called us to complain, all we could do was refer them to Washington or Dallas. It was very frustrating for all concerned," Commissioner Crawford said.

With last week's agreement of mutual assistance-the first of its kind and authorized under Section 506 of ERISA-Commissioner Crawford says he will be as aggressive as possible in investigating and resolving health care claims disputes.

Federal officials, though, caution that the agreement does not give the Oklahoma Insurance Department authority to legally resolve claims disputes, such as by filing suit.

"The Insurance Department cannot take legal action," said Mr. Ruud, the PWBA regional administrator in Dallas. If litigation action is necessary, the Labor Department would file suit, he said.

Similarly, the state of Oklahoma would have no authority to impose state-mandated benefit requirements on self-funded plans.

Despite the limited nature of the agreement, which federal officials describe as one centered on giving the Oklahoma Insurance Department greater ability to get health care plan benefit information from employers-not a delegation of investigative or legal authority under ERISA-employer benefits lobbying organizations and others are concerned the agreement could lead to state interference with employee benefit plans.

"While on its face the agreement seems innocuous, I still have a problem with the whole thing. Who wants an insurance commissioner banging on your door every time there is a complaint?" said Mark Ugoretz, president of the ERISA Industry Committee, a Washington-based benefits lobbying group representing large employers.

While the Oklahoma program is a pilot and is for only two years, Mr. Ugoretz worries that such agreements could spread, significantly complicating benefit administration for multistate employers.

"What if there were 50 of these and each of the 50 insurance commissioners interpreted its authority (under Labor Department) agreements differently? That could raise many of the same problems employers would have under a 50-state regime" of regulation, Mr. Ugoretz added.

Another employer group-the Assn. of Private Pension & Welfare Plans in Washington-says the agreement could be "innocuous, or it could indicate a very significant encroachment by states into the regulation of self-insured plans."

Both the Labor Department and the Oklahoma Insurance Department say that at a minimum the agreement will provide policymakers with important information about the volume, type and resolution of complaints involving self-funded health care plans.