Tuesday, March 9, 2021
In January, former President Donald Trump signed the Competitive Health Insurance Reform Act (CHIRA), which partially eliminated health and dental insurers’ decades-old exemption from federal antitrust laws under the McCarran-Ferguson Act for practices constituting the “business of insurance.” While CHIRA includes important carve-outs that preserve several previously recognized immunities, certain collaborative practices between health and dental insurers may be newly subject to federal antitrust scrutiny. Health and dental insurers should carefully assess their collaborative practices to ensure they do not run afoul of newly applicable federal antitrust laws.
THE MCCARRAN-FERGUSON ACT PRE-CHIRA
et seq., was passed decades ago in response to the Supreme Court’s decision in
To embed, copy and paste the code into your website or blog:
Just before leaving office, former President Trump signed the Competitive Health Insurance Reform Act (CHIRA) on January 13, 2021. Among other things, CHIRA amends the McCarran-Ferguson Act to repeal the federal antitrust exemption for health and dental insurance companies, though some carveouts will ensure that some collaborative conduct and information exchanges remain lawful. Under CHIRA, certain practices by health and dental insurance companies that had previously been exempt from antitrust scrutiny may expose these companies to new antitrust risks.
The “Business of Insurance” Exemption
Prior to CHIRA, the McCarran-Ferguson Act exempted the “business of insurance” from federal antitrust law scrutiny if the challenged practice was otherwise subject to state regulation and did not amount to an “act of boycott, coercion, or intimidation.” 15 U.S.C. §§ 1012(b); 1013(b). While the “business of insurance
Key Points - Until recently, the McCarran-Ferguson Act of 1954 made the “business of insurance,” including the business of health insurance, immune from federal antitrust.
Top Insurance Regulatory Developments of 2020: Part 2 By Brian Casey, Zach Lerner and Ben Sykes | January 26, 2021
This is the second installment of a two-part look at the top 10 insurance regulatory developments of 2020 by attorneys at Locke Lord. The first part on Jan. 22 covered COVID-19, Insurtechs, Data Privacy, Race Equality and Pharmacy Benefit Managers. Here they look at Antitrust, Captives, Service Contracts, Travel Insurance and Surplus Lines.
Health Insurers and Antitrust Laws
Blue Cross Blue Shield Anti-Trust Case Settlement
After more than eight years of contentious multi-district antitrust litigation between the Blue Cross and Blue Shield Association (“BCBSA”), its 36 member insurance plans (“BCBS Member Plans”) and their policyholders, regarding restrictions on competition among BCBS Member Plans, the parties finally came to a tentative settlement in the fall of 2020, including a $2.7 billion restitution fund to
cert. denied, 2013 WL 598864 (U.S. 2013).
2
See Federal Trade Com n v. National Casualty Co., 357 U.S. 560, 564, 78 S. Ct. 1260, 2 L. Ed. 2d 1540 (1958);
Ohio AFL-CIO v. Insurance Rating Bd., 451 F.2d 1178, 1183 (6th Cir. 1971);
Commander Leasing Co. v. Transamerica Title Ins. Co., 477 F.2d 77, 83-84 (10th Cir. 1973).
See also Union Labor Life Ins. Co. v. Pireno, 458 U.S. 119, 129 (1982) (finding the “business of insurance” to include practices that have “the effect of transferring or spreading a policyholder’s risk,” practices that are “an integral part of the policy relationship between the insurer and the insured” and practices that are “limited to entities within the insurance industry.”)