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Long before we developed the Farmers’ Health Cooperative of Wisconsin (FHCW), Cooperative Network initiated a project that is today widely known as “Co-op Care.”  Co-op Care put into Wisconsin law a statutory structure to aid in the development of health care purchasing cooperatives.  Because of Cooperative Network’s efforts, Wisconsin law today recognizes health care purchasing cooperatives as a means for individuals, farmers and other small employers to purchase health insurance as a large group and increase their buying power.  Like other cooperatives, health care purchasing cooperatives were created by Cooperative Network and the Wisconsin legislature to be member-owned, not-for-profit businesses that invest future earnings back into the cooperative and the health of its members.

The Co-op Care law comes in three parts.  2003 Wisconsin Act 101 is the original enabling legislation that allows for the formation of five health care purchasing cooperatives on a pilot project basis  It provides the framework for health care purchasing cooperatives, and contains a number of provisions that impact Co-op Care cooperatives.  For example, it is 2003 Wisconsin Act 101 that requires health purchasing cooperative members to pay at least their 36th month’s premium up front – something many cooperatives calls their “capitalization fee.” 

After 2003 Act 101 was enacted, the Wisconsin legislature decided they no longer wanted Co-op Care to be a pilot project.  In the beginning of the next legislative session, 2005 Act 30 was approved to remove the limit of five on the number of health care purchasing cooperatives that could be formed in Wisconsin.  

Meanwhile, Cooperative Network was already busy at work trying to put together a health care purchasing cooperative for farmers, FHCW.  During discussions with insurance companies, Cooperative Network learned that the state’s insurance regulator (Wisconsin Office of the Commissioner of Insurance, or OCI) might interpret the Co-op Care law differently than what was intended by legislators.  As a result, Cooperative Network sought to clarify the law via the enactment of 2005 Wisconsin Act 231.  This act requires the OCI to view Co-op Care cooperatives as large groups rather than a collection of small groups, which would be regulated much differently.

It is important to note that OCI does not have ongoing regulatory authority over Co-op Care cooperatives, including FHCW.  However, OCI has authority to do the following:

1. Designate the regions where Co-op Care cooperatives may operate in consultation with WFC.  FHCW is already approved for a statewide designation.
2. Regulate the insurance company FHCW contracts with for insurance, but only as a large group insurer.
3. Regulate the agents that sell FHCW plans.