Merritt Personal Lines Manual: Chapter 2 Multiple Employer Welfare Arrangements

Multiple Employer Welfare Arrangements (MEWAs) are employer funds and trusts providing health care benefits (among other benefits) to employees of two or more employers.

ERISA, the federal Employee Retirement Income Security Act which is designed to protect the insured if the insured is in a group health insurance plan, restricts states' ability to regulate employee welfare benefit plans while preserving state insurance laws having to do with reserve requirements. A state may regulate insurance, but may or may not consider an employee welfare benefit plan an 'insurance plan' for the purpose of regulation.

Some self-funded MEWAs claim they are not subject to Insurance Department regulation and operate under a supposed preemption under ERISA. As a result, many have gone unregulated and have fraudulently collected premiums from small business only to fold and leave millions of dollars of unpaid claims.

Regulators are attempting to resolve the question of jurisdiction. Meanwhile, in most states MEWAs need to obtain a Certificate of Authority in order to transact insurance business and must be fully insured by a licensed insurance company. Usually, agents and brokers are prohibited from assisting MEWAs to transact insurance until and unless the agent or broker files a report with the Department of Insurance outlining the MEWA's organization, insurance contracts, benefit plan description and the designated third-party administrator.