Committee backs bill to license wellness reimbursement program administrators

The committee considered and reported favorably a bill that would define and regulate wellness reimbursement programs and the companies that administer them. Staff said these programs are self‑insured medical reimbursement plans (often described as ancillary products sold to individual or group health plans) and are authorized under Internal Revenue Code provisions in sections 105 and 125.

Under the measure, program administrators would have to obtain a license from the Department of Insurance before selling or marketing programs, submit a $5,000 initial application fee plus financial statements from the prior two years, and pay $500 for renewals. Administrators would be required to comply with ERISA or obtain approval from the IRS or U.S. Department of Labor, maintain business records subject to inspection every three years, carry a surety bond, and meet competency, trustworthiness and financial responsibility standards. The director of the Department of Insurance would have discretion to suspend or revoke licenses for violations or deceptive practices; fines may not exceed $1,000 per offense, the staff summary said.

The bill’s sponsor told the committee he received testimony in the House describing past problems with bad actors and deceptive advertising in the sector. The committee moved and approved a favorable report by voice vote.