Skip Myers, a partner at Morris, Manning and Martin, Washington, D.C. and general counsel of the NRRA, said the trade group is writing the letter to Senate officials in opposition to the provision.

"We are deeply concerned that the provision could be misconstrued, cause confusion and is just an opportunity for expensive and time-consuming litigation," Mr. Myers said.

The provision was added to ensure the applicability of state law to combat fraud and abuse, Mr. Myers said.

The justification for the provision is that states need to apply their laws to multiple employer welfare associations, or MEWAs, and that the preemption of state law under the Employment Retirement Income Security Act and the Liability Risk Retention Act of 1986 should not apply.

Because ERISA and the LRRA preempt state law, preemption would be reversed under the provision, he said.

Mr. Myers said he can "understand what they are getting at, but the state laws regarding fraud and deceptive practices already apply." He noted, "Specific provisions in the LRRA already reference that. So, this provision is unnecessary because state laws already apply, and secondly, because it is confusing, unnecessary and creates confusion."

Mr. Myer said that if this provision is designed to combat fraud, "it is unnecessary, or, if it is intended to do something else, then that goal ought to be stated directly."

The Senate Finance Committee is writing its version of the bill, which will then be merged with the HELP Committee version when it is sent to the full Senate.

It now looks unlikely that the Senate committees will complete work on their version before the Senate leaves for its summer recess in early August.