Federal law lets states tax multiple employer welfare arrangements. [@@]
An official at the U.S. Department of Labor writes in an advisory letter to the Washington State Insurance Commissioner’s office that the Employee Retirement Income Security Act of 1974 permits states to collect premium taxes and high-risk pool assessments from MEWAs.
ERISA preempts many state efforts to regulate employee benefit plans.
But “it is the view of the department that the applications of the premium tax and high-risk pool assessments to a self-funded MEWA in accordance with the above referenced positions of the Washington Insurance Code would not be preempted by ERISA,” John Canary, a division chief in the Labor Department’s Office of Regulations and Interpretations, writes in the department’s new advisory letter.
The opinion is final, and there is no need for a conference on the issue, Canary writes.
MEWA administrators in Washington state had contended that the Washington premium taxes would be inconsistent with ERISA’s exclusive purpose and prudence requirements.
But Canary struck down those arguments, noting that at least one federal court has concluded that assessing state administrative charges on such plans is consistent with the intent of ERISA.