The Office of General Counsel issued the following opinion on December 30, 2004 representing the position of the New York State Insurance Department.
Re: Fully Insured Multiple Employer Welfare Associations (MEWA)
Does New York impose any special requirements on fully insured MEWAs?
Conclusion:
All New York requirements for fully insured MEWAs are imposed directly on the insurer.
Facts:
Since this was a general inquiry, no facts were furnished.
Analysis:
The provision of health care by an employer to employees and dependents constitutes an employee welfare benefit plan under ERISA. 29 U.S.C.A. § 1002(1) (West 1999). Pursuant to 29 U.S.C.A. § 1144(a) (West 1999), all state laws relating to employee welfare benefit plans are preempted by ERISA, except that, pursuant to 29 U.S.C.A. § 1144(b)(2)(A) (West 1999), laws regulating insurance are not preempted. There is an exception, however, to the general preemption of state laws with relation to MEWAs.
A MEWA is defined, 29 U.S.C.A. § 1002(40):
(A) The term "multiple employer welfare arrangement" means 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 any benefit described in paragraph (1) to the employees of two or more employers (including one or more self-employed individuals), or to their beneficiaries, except that such term does not include any
(B) The term "multiple employer welfare arrangement" means 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 any benefit described in paragraph (1) to the employees of two or more employers (including one or more self-employed individuals), or to their beneficiaries, except that such term does not include any such plan or other arrangement which is established or maintained-- (i) under or pursuant to one or more agreements which the Secretary finds to be collective bargaining agreements, (ii) by a rural electric cooperative, or (iii) by a rural telephone cooperative association.
The extent of state jurisdiction over a MEWA is set forth in 29 U.S.C.A. § 1144(b)(6):
(A) Notwithstanding any other provision of this section-- (i) in the case of an employee welfare benefit plan which is a multiple employer welfare arrangement and is fully insured (or which is a multiple employer welfare arrangement subject to an exemption under subparagraph (B)), any law of any State which regulates insurance may apply to such arrangement to the extent that such law provides-- (I) standards, requiring the maintenance of specified levels of reserves and specified levels of contributions, which any such plan, or any trust established under such a plan, must meet in order to be considered under such law able to pay benefits in full when due, and (II) provisions to enforce such standards, and (ii) in the case of any other employee welfare benefit plan which is a multiple employer welfare arrangement, in addition to this title, any law of any State which regulates insurance may apply to the extent not inconsistent with the preceding sections of this title.
. . .
(D) For purposes of this paragraph, a multiple employer welfare arrangement shall be considered fully insured only if the terms of the arrangement provide for benefits the amount of all of which the Secretary determines are guaranteed under a contract, or policy of insurance, issued by an insurance company, insurance service, or insurance organization, qualified to conduct business in a State.
An insurance policy issued to a MEWA must comply with all applicable requirements of the New York Insurance Law (McKinney 2000 and 2005 Supplement). If a MEWA is fully insured, the Insurance Department does not regulate it directly but imposes all applicable requirements upon the insurer.
For further information you may contact Principal Attorney Alan Rachlin at the New York City Office.