Motorcycle Riders Foundation -- MRF RIDERS’ UPDATE
PO BOX 1808, Washington, DC 20013-1808
202-546-0983 (voice) 202-546-0986 (fax)
wyld@mrf.org (e-mail) http://www.mrf.org (website)

June 8, 2001 #01-19 Phone: 202-546-0983


NOTE: The following is an excerpt from a detailed status report presented to the MRF Board of Directors at the board meeting in Topeka, Kansas, on June 3, 2001.

As reported in early May, the Department of Health & Human Services informed the Motorcycle Riders Foundation, the American Motorcyclist Association and ABATE of Wisconsin that it could not find legal justification to disallow the Clinton Administration rule for nondiscrimination against motorcycle riders in health care.

HHS will allow the rule on the 1996 Health Insurance Portability and Accountability Act (HIPAA) to proceed, in part because, quoting from HHS, "The statute provides that the prohibition on discrimination with respect to eligibility 'shall not be construed to require a group health plan...to provide particular benefits....'"

The Motorcycle Riders Foundation has conducted a thorough analysis of existing federal health care law and plotted a new strategy, in light of the HHS decision.

MRF's target when we initially entered the health care issue in the mid 1990's was the elimination of health care discrimination against motorcyclists. While HIPAA of 1996 assured coverage of motorcyclists at no greater premium, language elsewhere in the law allowed for benefits exclusion in certain cases at the discretion of the insurer. The associated regulation on HIPAA published in December 2000 stated in concrete terms that HIPAA did not prevent insurers from denying benefits to riders injured on their motorcycles. Because this benefits exclusion is so clearly stated, insurers are all but invited to cut costs at the expense of injured motorcyclists. THIS IS AN ENTIRELY NEW SITUATION THAT GRANTS A TOTALLY NEW POWER TO INSURERS THAT MAY PERMIT THEM TO DIS-ALLOW ANY PARTICULAR CLAIM TO ANYONE FOR ANY REASON!!! Thus, in a sense, our target is now larger than just the elimination of discrimination --- now we have to RESCUE our health care benefits. Thus, in the strategy, our target is clear: securing the most health care for the most motorcyclists in the shortest amount of time.


Numerous bills have been introduced in the 107th Congress to regulate health care. State legislatures have been more active on this issue, with over 1,000 managed care bills introduced each year since 1996.

There are no easy answers, in part because the regulatory environment is complex at best. State and federal powers sometimes compliment, sometimes supplement and often contradict each other. Some aspects of health care are regulated almost exclusively by the state; in others, the federal government commands the field.

Put another way, even if injury benefits were secured in HIPAA, not all motorcyclists would be protected. The most comprehensive action would be numerous initiatives at both the federal and state levels.

Because of the complexities, a thorough understanding of the health care regulatory environment is essential if we are to hit our target of rescuing the most health care for the most motorcyclists in the shortest amount of time.


FACT: About two thirds of Americans are insured through their employer (source: New England Journal of Medicine).

FACT: About 44 million Americans (roughly 17%) are in some form of self-insured health plans not regulated by the states. (source: Congressional Research Service [CRS]).

FACT: 60 to 70 million Americans (about 20% of the U.S. population) were enrolled in over 600 health maintenance organizations (HMOs) in 1996. In addition, 80 to 90 million persons were enrolled in more than 1,000 preferred provider organizations (PPOs) (another type of managed care organization). Altogether, some form of managed care covered over one-half of the U.S. population and almost three-quarters of insured employees. (source: Georgetown University).

FACT: The Federal Government regulates employer-provided health care (called “group health”) through laws such as HIPAA. However, when it comes to benefits, states still wield considerable power. For example, if the Federal government allows a coverage or benefit exclusion (say, excluding motorcyclists from accident benefits) that is not allowed by the state, a state that grants the greater benefit usually prevails. (source: CRS).

FACT: Roughly 40% of all employees are covered by self-insurance plans not regulated by the states but by the federal government through laws such as ERISA. (source: CRS).

FACT: With respect to business establishments with fewer than 100 employees, about 64% of employees participate in employer-provided group health (76% for businesses in excess of 100 employees). (source: National Center for Health Statistics [NCHS]).

FACT: 17.5% of all Americans under age 65 (some 45 million) have no health insurance. (source: NCHS).

FACT: Most Americans 65 and older rely on Medicare or private insurance (the latter is called "fee for service”). That’s 69.6 percent of all Americans over 65, or 22.3 million. (source: NCHS).


In 1945, Congress passed the McCarran-Ferguson Act (Public Law 15) that exempted the business of insurance from federal antitrust regulation provided the business is regulated by the states. The Act does not prevent the federal government from regulating insurance in the future, but a federal law that does so must explicitly state that it is overriding state power.

In 1974, the Employee Retirement Income Security Act (ERISA) was passed affecting employer-sponsored welfare benefit plans. It was crafted to leave the content and design of employer health plans to employers in negotiation with their workforce. An important element of ERISA is the so-called “deemer clause” (Section 514 of ERISA). The courts have interpreted this clause to mean that states cannot regulate employer-sponsored health plans themselves, only insurance sold to employers. As a result, if an employer even partially self-insures its own health plan, then, by law, it is regulated solely by the federal government under ERISA, not state insurance law.

ERISA’s preemption of state regulation makes self-insurance more attractive to employers (e.g., they pay no state tax on insurance premiums, no state-mandated benefits, etc.).

The HMO Act of 1973 was the first major federal law affecting the business of insurance since McCarren-Ferguson. This Act, however, only imposed requirements on HMOs that elected to become "Federally qualified.”

Following ERISA was “COBRA,” the Consolidated Omnibus Budget Reconciliation Act in 1985-1986 that imposed a continuation of coverage requirements for group medical expense insurance plans sponsored by employers with 20 or more employees. Should any "qualified beneficiary" covered by one of these plans lose coverage for reasons other than termination for gross misconduct, the individual has the right to continue their coverage for a period of no less than 18 months at a premium no greater than 102% of employer cost.

Finally, in 1996, HIPAA set minimum standards for, among other things, nondiscrimination. Prior to HIPAA’s enactment, almost all regulatory authority over the business of health insurance rested with the states. Once all HIPAA provisions are implemented, certain federal minimum requirements will apply to state-regulated insurers as well as employer-sponsored managed care plans.


HIPAA generally allows states to impose on insurers requirements that provide for greater protections to consumers. These “greater protections,” however, were offered in lieu of federal minimum benefit standards.

This latter point is crucial. Recall the reason cited by HHS for failing to assure accident benefits: "The statute provides that the prohibition on discrimination with respect to eligibility 'shall not be construed to require a group health plan...to provide particular benefits....'" This language reflects the will of the Congress at the time --- a will we must put to the test: as MRF reported in its May 8, 2001, news release, “there is a reluctance on the part of Congress past and present to set minimum federal health benefits.”

The guarantee of coverage at no greater premium (as opposed to a guarantee of benefits) in HIPAA was by no means a closely held secret:

September, 1997: The HIPAA group market rules prohibit a group health plan or health insurance issuer in the group market from establishing rules for an individual's eligibility to enroll in a plan that are based on an individual's medical history, evidence of insurability, or other health status-related factors. The legislative history indicates that evidence of insurability is intended to include personal activities, such as skiing or riding horses. Similarly, a group health plan or health insurance issuer in the group market cannot require an individual to pay greater premiums or contributions based on any health status-related factor. (source: Statement of J. Mark Iwry, Chief Benefits Tax Counsel, U.S. Department of the Treasury, at a hearing on HIPAA implementation before the Subcommittee on Health of the Committee on Ways and Means, September 25, 1997).

June, 1998: Does a Group Health Plan Have to Provide Any Specific Benefits? No, the Act does not require an employer or issuer of group health insurance to offer any specific benefits. But the Act also does not preempt (i.e., override) state insurance laws that mandate insurers to provide specific benefits or reimbursement of specific providers. Accordingly, fully insured plans issued to employers by insurers still have to comply with any state-mandated benefit laws that may exist. As is currently the case, plans that are not fully insured (that is, they self-insure (i.e., self-fund) part or all of the risk for paying claims for covered services) do not have to comply with state-mandated benefit laws because of a provision of ERISA. This from a CRS Report dated June 4, 1998, which incorporated a brochure on HIPAA.

As the 107th Congress opened, few if any observers predicted that health care reform would emerge as a leading issue. Up until the dramatic departure from the Republican Party by Senator Jim Jeffords of Vermont, further regulation of employer-sponsored health care plans was seen as a major challenge. Even after the Jeffords switch which placed control of the U.S. Senate in the hands of the Democrats, a majority in Congress were seen as reluctant to impose new requirements on employers where financial and administrative burdens would have an adverse economic impact.

This is by no means a conservative concern. Congressmen aligned with business concerns might argue that mandated benefits are wrong, because they almost always hike the costs to consumers. They may add that insurers have a financial incentive to offer unique benefits packages irrespective of government mandates.

Insurance advocates would certainly agree. “As both the states and the federal government more aggressively pursue so-called “patient protection’ legislation’ and other mandates, there is mounting evidence that these ‘reforms’ also have increased costs and added significantly to the ranks of the uninsured.” (source: Testimony by Charles N. Kahn III, President, Health Insurance Association of America, Employer-Employee Relations Subcommittee of the Committee on Education and Workforce, U.S. House of Representatives, June 11, 1999).

Other Congressmen may suggest that federal health policy has disenfranchised the poor and compromised their access to quality care; some of these Members, however, might argue against certain mandates, because some data show mandates increase the number of uninsured Americans. The National Center for Policy Analysis (NCPA) in 1988 estimated that 5.2 million to 9.3 million of the 37 million Americans uninsured at that time could not afford insurance due to the added cost of mandated benefits.

Columnists and other advocates for health reform also worry about costs driving up the uninsured through mandates: “[E]ach percentage point rise [in insurance premiums] increases the number of uninsured Americans by 300,000.” (source: Morton Kondracke, Roll Call, May 24, 2001).

There is also the question of federalism --- an issue of more than passing interest to the Motorcycle Riders Foundation and SMROs nationwide. Among the arguments made by MRF against the federal sanctions on rider-choice states was the belief that issues like mandatory helmet laws are best left to the states to decide. The welcoming words on the MRF website speak about the need to reduce federal involvement in the lives of motorcyclists. The entire thrust of many state officials (most of whom enjoy the support of State Motorcyclists’ Rights Organizations, is to place more power in the hands of the state and less power in the hands of Washington.


On May 23, 2001, Senator Jim Jeffords (R-Vt.) held a press conference with Senators William Frist (R-Tenn.) and John Breaux (D-La.) to tout their patients’ bill of rights legislation (S.899) which conforms to the Bush Administration principles on health care reform.

The next day, Senator Jeffords became an Independent, shifting control of the U.S. Senate to the Democrats.

The next day, it was announced that Senator Edward Kennedy (D-Mass.) took the helm of the Senate Health, Education, Labor and Pensions Committee.

Sources on both sides of the aisle report that the new power shift in the Senate sharply increases the prospects for enactment of patient protection legislation in 2001.

S. 283 by Senators John S. McCain (R-Ariz.), John Edwards (D-N.C.) and Kennedy would allow patients to sue their HMOs in state court when denied a treatment, test or referral A tort reformer, Bush opposes the measure on the grounds it would drive up litigation and insurance costs.

Kennedy-McCain-Edwards and its counterpart in the House --- sponsored by John Dingell (D-Mich.) and Charles Norwood (R-Ga.) --- have co-sponsors. To date, Frist-Jeffords-Breaux have no co-sponsors and no companion House measure.


Immediately after the HHS announcement concerning health care benefits for injured motorcyclists, MRF thoroughly researched the issue and enlisted the help of MRF Champions of Motorcyclists’ Rights and Safety. MRF also sought the direct involvement of SMROs who have visited Washington to advance the joint MRF-SMRO legislative agenda for 2001. We are also working with the American Motorcyclist Association with an eye toward building a coalition composed of individual groups of Americans impacted by the HIPAA loophole (e.g., horseback riders, skiers, etc.).

Because health care reform is one of the most divisive, major issues to confront the Administration and the 107th Congress, MRF is proceeding carefully yet forcefully to rescue health care. Again, the target is secure benefits for the most motorcyclists in the shortest amount of time.

How can you help?

Stay in the loop. As the strategy unfolds during the summer, motorcyclists will be kept informed through MRF RIDERS’ ALERTS. If you don’t already subscribe, click on this link so you can receive these alerts as they are broadcast. When action is called for -- phone calls, emails, faxes and personal visits to Members of Congress -- it is likely that action will be required IN A MATTER OF DAYS IF NOT HOURS.

Check your benefits. Study the fine print of your health care policy. Make sure you understand what benefits your policy ensures and what benefits are excluded. Insurance companies must be specific on excluded benefits. If your exclusions are vague, speak to your insurer or your employer’s health benefits counselor.

Ride with the Leaders (tm). Come to the Meeting of the Minds where you will receive a thorough briefing on our efforts to rescue health care, actions we’ve taken and actions we must take in the future. To help now, you can join the MRF at or call 800-MRF-JOIN. Various membership options are available.
- MRF: My Ride is Freedom -

The first motorcyclists' rights organization to establish a full-time legislative advocacy presence in Washington. The Motorcycle Riders Foundation is the only Washington voice devoted exclusively to the street rider. MRF established MRFPAC in the early 1990s to advocate the election of candidates who would champion the cause of rider safety and rider freedom. MRF proudly claims state motorcyclists' rights organizations and the very founders of the American rider rights movement among its leading members. Motorcyclists worldwide can thumb-start their search for rider rights and safety on the web at www.mrf.org.

All information contained in this release is copyrighted. Reproduction permitted with attribution. The Motorcycle Riders Foundation, incorporated in 1987, is an independent, membership-based national motorcyclists' rights organization headquartered in Washington D.C. which operates in co-partnership with State Motorcyclists' Rights Organizations nationwide. The MRF is involved in federal and state legislation and regulation, motorcycling safety education, training, licensing and public awareness. The MRF provides individual and SMRO member-volunteers with guidance, support and information to protect motorcyclists' rights and advance motorcycling and its associated lifestyle. The MRF sponsors annual regional and national educational seminars for motorcyclists' rights activists and publishes a bi-monthly newsletter, THE MRF REPORTS.

Voice: 202-546-0983, Fax: 202-546-0986, E-Mail: wyld@mrf.org, website: http://www.mrf.org

NEWS RELEASES & RIDER ALERTS   Current issues   News archive   Position papers
EVENTS & CONFERENCES   Posters   Registration   Video highlights
MRF REPORTS   Current reports   Report archive
REPS PAGE   State Reps   About the Reps/Program
ABOUT THE MRF   Mission   Core Values   MRF DC Office   Officers/Directors   Legislative Agenda
SUPPORTERS   Organizations   Members   MRF PAC   Join the MRF  
LINKS   MRF's favorite links   Research sites

Top of Page