The U.S. Department of Labor is ramping up its oversight of the multiple employer welfare arrangement industry (MEWA).
The agency posted a notice on its site recently that emphasized new rules that apply to the MEWAs. It used the “news” that new 2013 Form 5500s would be available for review only on its Employee Benefits Security Administration page to raise the MEWA regulatory issue.
The more stringent rules were included in the Patient Protection and Affordable Care Act and were specifically designed to tighten oversight of MEWAs.
A MEWA is defined by the DOL as “an employee welfare benefit plan, or any other arrangement (other than an employee welfare benefit plan) which is established or maintained for the purpose of offering or providing … [welfare plan benefits] to the employees of two or more employers.”
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The reason for DOL’s heightened oversight of MEWAs stems back to their emergence years ago as insurance plans that weren’t covered by state regulations and therefore were quite a bit cheaper than traditional plans that had to adhere to both state and federal laws. MEWAs, at least as their promoters expressed it, were subject only to Employee Retirement Income Security Act (ERISA) oversight.
Let’s let the DOL’s website page devoted to MEWAs tell the rest of the tale.
“For many years, promoters and others have established and operated MEWAs, also described as ‘multiple employer trusts’ or ‘METs,’ as vehicles for marketing health and welfare benefits to employers for their employees,” says the DOL’s website. “Promoters of MEWAs have typically represented to employers and state regulators that the MEWA is an employee benefit plan covered by the ERISA and, therefore, exempt from state insurance regulation under ERISA’s broad preemption provisions.