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Summary of differences between federal and state regulations
Among the various employee benefit programs established and governed by ERISA are multiple employer welfare arrangements (MEWAs), which are subject as well to state regulatory and fiscal standards consistent with ERISA.
Under state law, MEWAs provide health benefits or coverage to at least 100 employees and dependents of such employees of two or more employers who are members of a bona fide association.
Employers participating in a MEWA must continue health benefit coverage through the term of the contract and not terminate the contract early except for failure of the arrangement to provide health benefit coverage.
Self funded plans: Employers must pay an amount at least equal to the point at which the excess loss insurer has contracted to assume one hundred percent of additional liability.
Self-funded plans must submit its proposed excess loss insurance contract to the Commissioner of Insurance at least 30 days prior to the proposed plan's effective date and no more than 30 days subsequent to any renewal date.
Self-funded MEWAs are subject to the rules established by the commissioner for all insurers within this state, including but not limited to network adequacy, prompt payment of claims, appeals for the denial of benefits, complaints against an insurer, and privacy of information.
Trustees must be plan participants. No participating employer may be represented by more than one trustee. A minimum of two and a maximum of seven trustees may be elected. Trustees shall receive no remuneration, but may be reimbursed for actual and reasonable expenses incurred in connection with their duties as trustees.
Each trustee must be bonded in an amount not less than $100,000 nor an amount greater than $500,000 from a licensed bonding company.
Trustees, on behalf of the fund, must file annual reports with the commissioner within 30 days immediately following the end of each calendar year. The reports must summarize the financial condition of the fund, itemize collection from participating employers, and detail all fund expenditures.
MEWAs must file with the commissioner all of the following information on a form prescribed by the commissioner:
- A copy of the organizational documents of the MEWA, including the articles of incorporation and bylaws, partnership agreement, or trust instrument;
- A copy of each insurance or reinsurance contract that purports to insure or guarantee all or any portion of benefits or coverage offered by the MEWA to a person who resides in this state;
- A copy of the benefit plan description and other materials intended to be distributed to potential purchasers; and
- The names and addresses of all persons performing or expected to perform the functions of risk management, claims handling, or any other administrative function of a MEWA.
Material changes must be filed with the commissioner within 30 days of becoming aware (or should have been aware) of the change.
As of January 1, 2006, the premium adjustments for health status up to 35 percent above the modified community rate for a period no greater than 12 months if the employer has sought coverage as a small employer, do not apply to small employers that, due to a change in employment status within the state or a change in corporate structure motivated by a change in business purpose that is unrelated to health care, is no longer eligible to participate in a MEWA, and that, currently or immediately prior to seeking coverage in the small group market, participates or participated in a MEWA, and is fully insured by a licensed insurer. (§10-16-105)
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Regulations
Regulations on Colorado MEWAs can be found at Colorado Revised Statutes, Title 10 - Insurance, Article 16 – Health care, Part 9 – MEWAs. §§10-16-901 through 10-16-909.
www.lexisnexis.com/hottopics/michie/