On January 13, 2021, President Trump signed the “Competitive Health Insurance Reform Act of 2020” (“CHIRA” – HB 1418, now Public Law 116-327; see https://www.congress.gov/bill/116th-congress/house-bill/1418/all-actions?overview=closed#tabs.) which partially repealed the exemption for “insurance activities” from the 1940s[1] antitrust laws. Although some specific activities are not included in the repeal, CHIRU generally eliminates the exemption for “health insurance activities (including dental insurance activities and limited scope dental benefits)”.
Obviously, the immediate radical change – the elimination of the antitrust exemption – is important, but it is premature to comment at this time on what exactly that might mean for payers, providers and subscribers. The impact of CHIRA will be felt over time. What is known is that CHIRA is designed to add a new layer of compliance and the attendant oversight of federal antitrust authorities to the activities of all participants involved and effected by the health and dental insurance industry.
It is important to note that the partial repeal specifically sets out several exclusions, each relating to an important activity and of a practical nature. Namely, the collection, compilation and dissemination of historical loss information, determination of loss evolution factors applicable to historical loss data, performance of actuarial services not involving trade restrictions and the development of standard police forms arguably remain immune to antitrust scrutiny. And, at the same time, CHIRA is also making it very clear that life and P&C business remain subject to the McCarran-Ferguson exemption.
The 30,000-foot question is what “activities” – previously exempt – will now be subject to antitrust review by the Federal Trade Commission (FTC) and / or the US Department of Justice (DOJ)? Antitrust and regulation are opposite sides of the same coin and for years the health and dental insurance industry was more regulated than it was at risk for antitrust liability. How this will change with antitrust control now more present will be heavily influenced by the policy decisions relating to CHIRA that will be made by the FTC and DOJ when establishing their enforcement programs. If anything is clear, payers, providers and subscribers will each think in their own way and take a closer look at the pro-competitive aspects and benefits of things like their collaboration activities and communications.
We will monitor these activities as they develop, and our antitrust and insurance practice will report and update issues generated by CHIRA as relevant policies are developed and enforcement decisions are made. taken and implemented.
- Very generally, case law has developed the elements of the “insurance business” to cover activities that involve a transfer of risk, are part of the classic carrier-insured relationship, are limited to the insurance sector, are subject to regulatory and do not involve coercion, intimidation or boycott.
