Self-Insured Employers May Need to Pay State of Washington “WAPAL Fund” Fee
Oct 27, 2021
The state of Washington has passed legislation that requires group health plans to pay a quarterly assessment to support a state program (the State of Washington (WA) Partnership Access Lines (PAL) Funding Program or “WAPAL Fund”) that assists medical providers with managing patients’ mental health needs. The new fee applies retroactively to July 1, 2021.
Reporting and Paying the Fee
Self-insured employers with covered members in the state of Washington should verify whether their third party administrator (TPA) is handling this on their behalf or if they must file and pay this fee on their own. If the TPA is not handling this, then the employer must register at and report enrollment counts each quarter. Once enrollment data is reported, the employer will receive an invoice for the assessment amount of $0.13 per covered life per month.
The first payment is due November 15, 2021 for third quarter 2021 enrollment (July, August, and September). Subsequent payments will be due 45 days after the end of each calendar quarter.
Applicability to Employers Subject to ERISA
Employers subject to ERISA may argue that they are exempt from the fee due to ERISA preemption of state laws, but the WA state law specifically states that the fee applies to any plan that covers employee living in the state of Washington, even self-insured plans that are sponsored by employers located in other states. Unless and until this law is successfully challenged in court by employers subject to ERISA, it is suggested that any self-insured employer covering employees living in Washington register with the state and begin making the quarterly payment by November 15, 2021, if the TPA is not handling it for you.
Health insurance carriers will be required to pay the fee for fully-insured groups, so no action is necessary by employers sponsoring fully-insured plans.
IMA will continue to monitor regulator guidance and offer meaningful, practical, timely information.
This material should not be considered as a substitute for legal, tax and/or actuarial advice. Contact the appropriate professional counsel for such matters. These materials are not exhaustive and are subject to possible changes in applicable laws, rules, and regulations and their interpretations.
