Tagged: MEWAs

Multiple Employer Welfare Arrangements (MEWAs) are established for the purpose of offering health coverage and other benefits to the employees of two or more employers (including self-employed individuals). MEWAs are typically marketed to small employers as a low-cost alternative to traditional forms of health insurance. MEWAs do not include plans determined by the Secretary of Labor to be collectively bargained. Although MEWAs that are properly operated can provide an option for small employers seeking affordable employee health coverage, many have deployed abusive and fraudulent practices and become financially unstable, resulting in too many cases in which MEWAs have failed to pay claims. The Affordable Care Act amended ERISA to require MEWAs to register with the Secretary prior to operating in a State. This new registration enhances the existing reporting rules to require all MEWAs as well as certain other entities that offer or provide health benefits to the employees of two or more employers to register with the Department via the Form M-1. These proposed changes would also require MEWAs that are ERISA plans which are subject to the Form M-1 filing requirements to also file a Form 5500 Annual Return/Report, regardless of plan size. These new rules will allow the Department to collect certain custodial and financial information on these entities and assist with identifying abusive and fraudulent MEWAs before they harm small employers and participants. The Affordable Care Act also amended ERISA to authorize the Secretary to issue a cease and desist order when it appears that conduct of the MEWA is fraudulent, or creates an immediate danger to the public safety or welfare, or is causing or can be reasonably expected to cause significant, imminent, and irreparable public injury. Source: DOL Fact Sheet “Multiple Employer Welfare Arrangements: Affordable Care Act Proposed Regulations”