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Creates a new ERISA option called a “health marketplace pool” that can be treated as an employer for offering group health plans or group health insurance if it meets formation, nondiscrimination, enrollment, and administrative rules. The measure lists what those pools may offer (including drug‑only plans), who can join, how enrollment and eligibility work, and what powers pool administrators have, and it clarifies that joining a pool by itself does not make a member an employer, joint employer, or a fiduciary. It also amends ERISA’s definitions to reflect the new pool option and to state that mere membership in a pool is not, by itself, a fiduciary act for covered group health plans.
Amends the definition of “employer” in section 3(5) of ERISA (29 U.S.C. 1002(5)) to include any entity that meets the requirements under new section 736(b) for purposes of offering a group health plan or group health insurance coverage (which may include plans or coverage that offer prescription or nonprescription drugs as the only benefit in accordance with section 736(b)(5)(B)).
Adds new section 736 (Health marketplace pools deemed an employer) to Part 7 of subtitle B of title I of ERISA (29 U.S.C. 1181 et seq.), stating that an entity that meets subsection (b) is deemed an employer under section 3(5) for offering group health plans or group health insurance coverage.
Organization: A health marketplace pool must be formed and maintained in good faith to form a risk pool to offer group health insurance coverage or a group health plan to its members, and the pool may not condition membership on any health status–related factor for any individual (including employees or dependents).
Offering plans — availability and rates: The pool must make available a group health plan or group health insurance coverage to all members (and employees of member employers) at rates established by the pool or a contracting issuer on a policy/product specific basis; subject to sections 701 and 702, rates may vary for individuals covered through the pool.
Permissible coverage for dependents: The group health plan or group health insurance coverage may be made available to dependents of members or dependents of employees of member employers.
Who is affected and how:
Employers and small businesses: Employers may participate in or rely on a qualifying health marketplace pool to provide group health coverage without each participating entity having to sponsor a separate plan. Small employers could gain access to pooled purchasing and plan options (including drug‑only coverage) that may lower administrative burdens and potentially improve bargaining power with insurers and vendors.
Health insurance issuers, third‑party administrators, and brokers: Insurers and TPAs will interact with new pool sponsors as plan sponsors. Pools create a new contracting counterparty and may change vendor relationships, marketing channels, and administrative workflows.
Employees and plan members: Workers who are members of employers that join a qualifying pool may have access to group health coverage through the pool, with specified enrollment and eligibility protections. The nondiscrimination provisions are intended to preserve fair access and benefits across participants.
Plan sponsors and fiduciaries: The legislation reduces the risk that mere membership in a pool will itself create fiduciary status for other members, but pool sponsors and actual plan fiduciaries must still comply with ERISA fiduciary duties and administrative obligations. Sponsors will need to ensure their pool governance, contracts, and operations meet the statutory rules.
Regulators and courts: ERISA administrators, insurance regulators, and courts will need to interpret and apply the new statutory category and its cross‑references in enforcement, oversight, and litigation contexts. Because the law clarifies some fiduciary questions while creating a new entity type, there may be litigation over boundary issues and compliance obligations.
Potential benefits and risks:
Benefits: Expanded access to group coverage for smaller employers; potential administrative efficiencies; clearer statutory treatment to limit inadvertent employer/joint‑employer or fiduciary exposure from mere membership.
Risks and uncertainties: Implementation complexity for pool formation and compliance; potential market fragmentation if pools attract particular risk mixes; state insurance regulation interactions (insurers providing coverage to pools remain subject to applicable insurance law); possible litigation over whether particular facts (beyond mere membership) create employer or fiduciary status.
Timing and costs:
Amends the definition of 'employer' in ERISA section 3(5) by adding language that deems the term to include entities that meet the requirements under new section 736 for purposes of offering a group health plan or group health insurance coverage (including plans or coverage that may cover only prescription or nonprescription drugs in accordance with the new section).
Adds a new section (section 736) to Part 7 of subtitle B of title I of ERISA establishing 'health marketplace pools' as deemed employers for the limited purpose of offering group health plans or group health insurance coverage and setting out requirements and rules for those pools (organization, nondiscrimination, coverage rules including allowing drug-only plans, membership and enrollment rules, administrative services, and a rule that participation does not create employer or joint-employer status for other purposes).
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Read twice and referred to the Committee on Health, Education, Labor, and Pensions.
Introduced June 17, 2025 by Rand Paul · Last progress June 17, 2025
Read twice and referred to the Committee on Health, Education, Labor, and Pensions.
Introduced in Senate
