Headlines about "Multiple Employer Welfare Arrangements (MEWAs)"
Gathered from the web by the editors at BenefitsLink.com.
Former Chief Fiduciary of Several 'Multiple Employer' Pension Plans Indicted on Charges of Misappropriation of Funds
"Matthew Hutcheson, former Chief Fiduciary of several multiple employer plans, was arrested [on April 11], charged with 17 counts of wire fraud and 14 counts of misappropriating pension funds. The indictment seeks to recover more than $5 million which the federal government claims Mr. Hutcheson misappropriated from the plans and spent making renovations to his house and buying two SUVs, a BMW convertible, two motorcycles, and a John Deere tractor, along with spending $3 million in a failed attempt to buy the Tamarack Resort in Donnelly, Idaho." (The Pension Protection Act Blog)
[Guidance Overview] DOL Field Assistance Bulletin Clarifies Use of Plan Assets by Employer-Sponsored Apprenticeship and Training Programs
"The bulletin should assist employers in determining which types of program-related expenses are consistent with ERISA fiduciary obligations. In particular, abuses may result from: Lack of oversight of plan vehicles, equipment and inventory; Unreasonable instructor salaries and bonuses; [and] Excessive employee meal stipends that are not reasonably related to a plan's training program." (Practical Law Company)
Secretary of Labor Suit for Breach of Fiduciary Duty Alleged Defendants Established ERISA Health Benefit Plan
"Defendants had retained, as compensation, a substantial portion of payments made by businesses to enroll their employees. The complaint alleged improper diversion of funds and that defendants were required by ERISA to use the assets only for the defraying reasonable plan expenses for the benefit of plan participants. (Justia.com)
[Opinion] Comments on Proposed Rule on Filings Required of MEWAs and Certain Other Related Entities
Links to comments from interested parties are provided on the target page. (Employee Benefits Security Administration)
Multiple Employer Plans: Opportunities and Challenges for Multiple Employer Welfare Arrangements (PDF)
"This installment addresses MEPs providing health and welfare benefits, particularly multiple employer welfare arrangements [MEWAs]. In concept,MEWAs are designed to give employers access to low cost health coverage and may represent the only available option for small employers who are unable to obtain insurance coverage due to underwriting risks. However, MEWAs have a long history of abuse, which has made them the focus of many policy discussions and much regulatory scrutiny." (K&L Gates LLP)
[Guidance Overview] Pension Plan's Choice of Interest Rate to Calculate Withdrawal Liability Not an Abuse of Discretion
"A multiple-employer pension plan's board did not abuse its discretion when it used what an employer described as an 'unreasonably low' interest rate to calculate the amount of the employer's withdrawal liability, the [court] has ruled." (Wolters Kluwer Law & Business / CCH)
[Opinion] New MEWA Reporting Requirements: An Unlikely Solution to MEWA Fraud
"The DOL has proposed a rule that, upon adoption, would implement reporting requirements for MEWAs and certain other entities that offer or provide health benefits for employees of two or more employers.... The DOL seems to think that the new requirements, penalties and criminal sanctions for false reports will have an effect on promotion of fraudulent MEWA's. Why?" (Health Plan Law)
Principal Developments in Compensation & Benefits, Winter 2012
The newsletter covers recent issues on health benefits, retirement plans, executive compensation, and MEWAs. (Katten)
[Official Guidance] U.S. Labor Department Extends Comment Period on Proposed Rules on Filings Required by Multiple Employer Welfare Arrangements
"Interested parties now have until March 19, 2012, to submit comments on the proposed rule ... Those who have already submitted comments or plan to submit comments should note that there was an error in the preamble published in the Federal Register ... that incorrectly listed the EBSA email address.... [C]omments sent electronically [via email] prior to February 22, 2012, should be resent to the correct email address[.]" (Employee Benefits Security Administration)
Recent DOL Initiatives: Questions Answered
"Last month, advisory board member Sherwin Kaplan and his colleague at Nixon Peabody, Eric Paley, conducted a webinar titled 'Managing and Protecting Your Employee Benefit Plans: New [DOL] Initiatives.' As part of that webinar, [they] took questions from the audience, but they were unable to get to every question in the time allocated[.] Sherwin ... agreed to answer outstanding questions[.] The following are questions submitted during the webinar, with Sherwin's answers.]" (Bloomberg BNA)
[Guidance Overview] DOL's Proposed New Rules that Will Affect Multiple Employer Welfare Arrangements (PDF)
"The two areas of concern are: (1) the Secretary of Labor's ability to issue a cease and desist order or a summary seizure order; and (2) the reporting and disclosure requirements for MEWAs. The DOL has also proposed revisions to the Form 5500 and the Form M-1 for MEWAs." (Conrad Siegel Actuaries)
[Guidance Overview] 2011 Form M-1 Now Available; New Question Addresses Compliance with Health Care Reform Mandates
"Administrators accustomed to the detailed information in the self-compliance tool may find the references to the health care reform web page considerably less helpful, but presumably they will have worked with their advisors to confirm compliance with the health care reform mandates before preparing the filing." (Thomson Reuters/EBIA)
[Official Guidance] EBSA Publishes 2011 Form M-1 for Multiple Employer Welfare Arrangements
"The 2011 Form M-1 is now available for online filing." (U.S. Employee Benefits Security Administration)
The Proposed MEWA Rules: Cracking Down on Health Insurance Scams
"With little fanfare and little attention from the media, the Obama Administration recently issued proposed rules to crackdown on health insurance scams that use ERISA to avoid state law enforcement and regulatory actions." (Health Affairs)
[Guidance Overview] 2012 Key Administrative Dates and Deadlines for Calendar-Year Single-Employer Defined Benefit Plans (PDF)
The calendar applies to plans subject to ERISA and the Internal Revenue Code. (Milliman, Inc.)
[Guidance Overview] IRS Issues Sample Amendment for Section 436 and Postpones Date for Amending Single-Employer Pension Plans
"Administrators and consultants should review the IRS sample amendment with Counsel and adopt it or another amendment by the last day of the plan year beginning in 2012 unless a later date applies. A decision will need to be made on which, if any, of the optional provisions in part 3 of the amendment they wish to adopt, and whether the provisions conflict with existing provisions of the plan. They also need to make sure the effective date they use is appropriate for the plan." (Cheiron, Inc.)
[Guidance Overview] To Combat MEWA Abuses, DOL Proposes Increased Reporting and Enforcement
"Those who work with MEWAs and ECEs will want to review these proposed regulations and related items carefully. But everyone should keep in mind that these changes are only proposed, and no changes will take effect before final regulations are issued. The DOL is accepting public comments on the proposals through March 5, 2012." (Thomson Reuters/EBIA)
[Guidance Overview] DOL's Proposed New Rules Affecting Multiple Employer Welfare Arrangements
"Under the proposed rule, MEWAs that provide medical care benefits (but are not group health plans) are now required to register with the Secretary of Labor prior to operating in any state in the United States. The rule defines what constitutes 'operating' in a state; addresses how a MEWA may register . . .; describes what information must be included; and addresses the penalties for noncompliance (which include criminal penalties for intentional misrepresentation)." (Littler Mendelson P.C.)
[Guidance Overview] Proposed New Enforcement Procedures and Reporting for MEWAs (PDF)
"While the objective of these rules is to police fraudulent or otherwise abusive arrangements in the marketplace, as discussed above, a bona fide welfare plan covering employees of multiple members of a business enterprise sometimes can also be a MEWA, depending on the ownership, control and other structural relationships in that enterprise. The consequences of the proposed reporting rules in those circumstances should be carefully considered . . . ." (Sutherland Asbill & Brennan LLP)
Focus on Health Care Fraud: MEWAs
This Web page is a collection of information starting with the fact sheet: 'How To Protect Your Employees When Purchasing Health Insurance' - A fact sheet with tips employers can use when comparing benefits and costs of multiple insurance products. (U.S. Employee Benefits Security Administration)
[Guidance Overview] DOL Proposed Regulations Target MEWA Abuses
"The DOL's authority to issue cease and desist orders under the proposed regulations is not limited to MEWAs that are ERISA-covered employee welfare benefit plans. Instead, the authority reaches any arrangements that control the assets or management of ERISA-covered plans established and maintained by others." (Practical Law Company)
Multiple-Employer Health Plans To Face Quick Enforcement Procedures
"Under a proposed rule stemming from the health law, the secretary of labor will have enforcement tools designed to protect employers, providers and workers from mismanaged or fraudulent multiple-employer welfare arrangements." (The Henry J. Kaiser Family Foundation)
[Official Guidance] Text of EBSA Fact Sheet on Multiple Employer Welfare Arrangements Affordable Care Act Proposed Regulations
"Before this change provided for under the Affordable Care Act, stopping the activities of an abusive arrangement immediately and freezing its assets required a court-issued temporary restraining order and preliminary injunction. Obtaining this remedy required the Secretary to show the likelihood of a fiduciary breach, and the need for immediate protective action. With this new authority, the Secretary may take steps to protect plan participants and small employers much earlier in the process, before all of the assets have been exhausted." (U.S. Employee Benefits Security Administration)
DOL Seeks Tougher Rules on 'Multiple-Employer' Plans
"Federal officials hope to crack down more effectively on operators of 'multiple employer' health plans that have defrauded small businesses and their workers of hundreds of millions of dollars, often leaving them stuck with unpaid medical bills, according to new rules proposed Monday by the Obama administration under the health care legislation." (The New York Times; free registration required)
[Official Guidance] Text of EBSA Notice of Proposed Revision of the Form M?1 (PDF)
"This document announces proposed revisions to the Form M?1, Report for Multiple Employer Welfare Arrangements (MEWAs) and Certain Entities Claiming Exception (ECEs). The revisions can be viewed on the [EBSA] Web site at www.dol.gov/ebsa." (U.S. Employee Benefits Security Administration)
[Official Guidance] Text of EBSA Notice of Proposed Revision of Annual Information Return/Reports Form (PDF)
"This document contains proposed revisions to the Form 5500 Annual Return/Report filed by administrators of employee benefit plans. The proposed revisions are intended to enhance the Department ofLabor's ability to enforce the reporting requirements for multiple employer welfare arrangements (MEWAs) under Title I of [ERISA]." (U.S. Employee Benefits Security Administration)
[Guidance Overview] MEWA Participating Employer Cannot Offset Contribution Overpayments
"A multiemployer welfare fund has won summary judgment in [an Eastern District of Missouri federal court] suit claiming a participating employer offset contributions by past overpayments in violation of [ERISA]." (PLANSPONSOR.com)
[Guidance Overview] Federal Rate Review Rules Revised to Reach Nongrandfathered Association Health Insurance
"[HHS] rate increase review rules now apply to all nongrandfathered individual and small group MEWA and other association health insurance. HHS amended the rules to reflect its position that such coverage is subject to the same rules as health policies sold directly to individuals and small employers." (Mercer LLC)
The Impact of the Recession on Employment-Based Health Benefits: The Case of Union Membership (PDF)
"In 2009, 80.4 percent of union workers were covered by health benefits through their own job, compared with 52.2 percent of nonunion workers." (Employee Benefit Research Institute)
[Opinion] Discussions of Issues on Multiple Employer Plans
"[At a recent meeting with DOL staff, t]he question arose as to whether a non-association MEP would qualify as a single plan under ERISA, so to enable a single Form 5500, single audit, and a host of other things. DOL staff's reaction was that they believed that a non-benefit related commonality is needed, but they also expressed a willingness to discuss the idea. We explored several different points." (Business of Benefits published by Robert Toth, Jr.)
[Guidance Overview] FASB Modifies Proposed Multiemployer Plan Participation Disclosures
"At its meeting on May 31, the Financial Accounting Standards Board (FASB) tentatively agreed that it will not require employers to disclose an estimate of withdrawal liability for each material multiemployer defined benefit plan in which they participate, as it had previously proposed." (Morgan, Lewis & Bockius LLP)
[Guidance Overview] Participants May Consider Surrender Charges When Determining Taxable Value of Life Insurance Policies Distributed from Nonqualified Plan
"The distributions stemmed from an ill-fated effort to create a multiple employer welfare benefit trust designed to conform with Code Sec. 419A(f)(6)." (Wolters Kluwer Law & Business)
Multiple Employer Plans: An Opportunity for Expanding Retirement Plan Coverage (PDF)
"This paper provides an analysis and specific recommendations for the enhancement of defined contribution MEPs to facilitate their usage by employers who do not sponsor a retirement savings plan for their workers." (Transamerica Retirement Services)
VEBAs, Welfare Plans & Sec. 419a(F)(6): Is the IRS Trying to Regulate or Spread Propaganda?
"The article examines recent private letter rulings and faulty reasoning used by IRS personnel. Based on precedent, the authors opine that the IRS is engaged in a propaganda campaign to discredit welfare plans as appropriate financial planning tools for business owners and large companies." (Social Science Research Network)
[Guidance Overview] EBSA Adopts Technical Changes to Form 5500 Schedules MB and SB for Funding Relief
"The IRS provided guidance concerning retroactive pension funding relief for multiemployer defined benefit plans in IRS Notice 2010-83 and for single-employer defined benefit plans (including multiple employer defined benefit plans) in IRS Notice 2011-3." (Wolters Kluwer Law & Business)
[Guidance Overview] Insurer Must Be Licensed by State to Insure the Types of Benefits Offered in Order for MEWA to Be Fully Insured
"The insurer must be obligated first-in-line to pay all benefits due under the plan directly to plan participants, the [DOL] explained." (Deloitte via BenefitsLink.com)
[Guidance Overview] IRS Issues Funding Relief Guidance for Single-Employer Plans (PDF)
"These developments affect sponsors of and participants in single-employer and multiple employer defined benefit plans. They do not affect multiemployer plans, governmental plans or church plans that do not elect to be covered by ERISA ('non-electing church plans')." (Pension Analyst)
[Official Guidance] Multiple Employer Trust Was Not Fully Insured for Purposes of ERISA's MEWA Preemption Rule
"The rule allowing more limited state regulation of a fully insured MEWA is premised on the insurer being subject to full state regulation for the type of benefits insured under the policy (in this instance, group health benefits)." (EBIA Weekly Archives)
[Guidance Overview] MEWA That Was Still Not Fully Insured After Revisions to Insurance Certificate Remained Subject to State Regulation
"Despite revisions to an insurance certificate, a welfare trust fund that was a MEWA was not fully insured for purposes of preemption provisions of ERISA and, thus, was subject to state insurance regulation to the extent that the state law was not inconsistent with ERISA, according to EBSA Advisory Opinion No. 2011-01A." (Wolters Kluwer)
[Guidance Overview] MEWA Subject to State Laws Because It Was Not Fully Insured
"If the MEWA is 'fully insured,' the ERISA Sec. 514(b)(6)(A) exemption would limit the application of state insurance laws to those laws pertaining to the maintenance of specified levels of contributions and reserves." (Wolters Kluwer)
MEWA Is Subject to State Laws, DOL Asserts
"The Custom Rail Employer Welfare Trust Fund . . ., an employee health care benefit program designed exclusively for the rail industry, is a MEWA and is not fully insured for purposes of ERISA, according to Department of Labor Advisory Opinion 2011-01A." (Wolters Kluwer)
[Official Guidance] Text of EBSA Advisory Opinion 2011-01A on a Multiple Employer Welfare Arrangement
"Whether the Custom Rail Employer Welfare Trust Fund, which is a 'multiple employer welfare arrangement' within the meaning of ERISA section 3(40), is 'fully insured' within the meaning of ERISA section 514(b)(6)." (U.S. Employee Benefits Security Administration)
[Guidance Overview] 2010 Form M-1: New Questions Address Compliance With GINA and Michelle's Law
"Form M-1 filings should be completed on a timely basis; substantial penalties apply for failure to comply with the reporting requirements. If an extension is needed, the extension request must be filed by the original March 1, 2011 deadline." (Thomson Reuters/EBIA)
[Official Guidance] Text of Notice on the Availability of Year 2010 Form M?1 with Electronic Filing Option (PDF)
2 pages. Excerpt: "This document announces the availability of the Year 2010 Form M?1, Annual Report for Multiple Employer Welfare Arrangements and Certain Entities Claiming Exception. It is generally identical to the 2009 Form M?1, except that a few changes were made to update the Part 7 compliance questions to reflect the current provisions of Part 7 that were effective in 2010." (U.S. Employee Benefits Security Administration)
[Official Guidance] Text of Form M-1: Report for Multiple Employer Welfare Arrangements and Certain Entities (PDF)
47 pages. Excerpt: "This package contains the following form and related instructions: Form M-1; Instructions; Self-Compliance Tool." (U.S. Employee Benefits Security Administration)
[Guidance Overview] Schedule C: A New Era in Annual Reporting (PDF)
4 pages. Excerpt: "The DOL expanded Schedule C disclosure as the first of a series of three 'fee disclosure' regulations intended to improve transparency and to provide plan fiduciaries and plan participants better information on which to base their decisions regarding the selection of service providers and the services they render." (American Society of Pension Professionals & Actuaries via PrimeTRUST Advisors)
New Federal Rules Target MEWA's
Excerpt: "[Health] reform legislation contains several provisions directed at Multiple Employer Welfare Arrangements ('MEWA's'). A new criminal enforcement section contains broad language prohibiting false statements. [One section] prohibits false statements about a MEWA as to: the MEWA's financial condition or solvency, the benefits provided, or the regulatory status of the MEWA under state or federal law, including specifically the exemption of the MEWA from state regulatory authorities." (Roy Harmon via Health Plan Law)
[Guidance Overview] IRS Final Benefit Restriction Regulations (PDF)
6 pages. Excerpt: "These developments affect sponsors of and participants in qualified single-employer and multiple employer defined benefit plans." (Prudential Retirement)
[Guidance Overview] PowerPoint Presentation: Preparing Form 5500 Schedule C
19 slides. Excerpt: "On January 12th, 2010, the U.S. Chamber of Commerce co-sponsored a webinar in conjunction with the Securities Industry and Financial Markets Association and the Profit Sharing/401k Council of America to help plan sponsors address the practical issues they may face when filing the Form 5500 Schedule C." (U.S. Chamber of Commerce)
[Guidance Overview] SEC Final Enhanced Compensation and Corporate Governance Disclosure Requirements
Excerpt: "Note that the SEC stated in the release that under the current CD&A disclosure rules, to the extent that risk considerations are a material aspect of the company's compensation policies or decisions for its named executive officers, the company is required to discuss them as part of the CD&A and will continue to be required to discuss them in the CD&A after the adoption of these amendments." (Mintz, Levin, Cohn, Ferris, Glovsky and Popeo P.C.)
GASB Issues OPEB, Bankruptcy Guidance Statements
Excerpt: "The rulemaking organization has released Statement No. 57, OPEB Measurements by Agent Employers and Agent Multiple-Employer Plans and Statement No. 58, Accounting and Financial Reporting for Chapter 9 Bankruptcies." (PLANSPONSOR.com)
[Official Guidance] IRS Notice on the Availability of the Year 2009 Form M?1 with Electronic Filing Option (PDF)
Excerpt: "This document announces the availability of the Year 2009 Form M-1, Annual Report for Multiple Employer Welfare Arrangements and Certain Entities Claiming Exception. It is substantively identical to the 2008 Form M-1. The Form M-1 may again be filed electronically over the Internet. . . . Copies of the Form M?1 are available on the Internet at ." (U.S. Employee Benefits Security Administration)
Small Employers Get a Reprieve on Huge Penalties Over Pension, Health Plans
Excerpt: "Hundreds of small employers caught a break last week when the Internal Revenue Service agreed to extend its moratorium on collecting penalties from them. During the past four years, the IRS has increased its auditing of small employers with pension and health and welfare plans to make sure they comply with a 2004 tax code change that requires these companies to notify the agency that they have plans that act as tax shelters. The fines for failing to do so are $200,000 per business per year the plan has been in place and $100,000 per individual." (Workforce Management)
[Guidance Overview] 2008 Form M-1, Including Self-Compliance Tool, Made Available by DOL with Few Changes from Previous Year
Excerpt: "EBIA Comment: Substantial penalties apply for failing to comply with the Form M-1 reporting requirements -- the administrator of a MEWA may be subject to penalties of up to $1,100 per day of noncompliance and there is also the potential for personal liability of the administrator. Thus, filings of the Form M-1 should be completed on a timely basis." (Employee Benefits Institute of America)
[Official Guidance] DOL Form M-1 Now Available; Annual Report for Multiple Employer Welfare Arrangements and Certain Entities Claiming Exception (PDF)
It is substantively identical to the 2007 Form M-1. The Form M-1 may again be filed electronically over the Internet. (Employee Benefits Security Administration. U.S. Department of Labor)
[Guidance Overview] VEBAs For Non-Union Private Employers Face Unrelated Business Income Taxes
Excerpt: "Although VEBAs established under ? 501(c)(9) are tax-exempt, they must pay tax on UBTI [under Internal Revenue Code section 512(a)(3)(A)]." (McGuireWoods)
[Guidance Overview] ERISA Does Not Prohibit Proposed Transfer of Assets from Terminated MEWA to Tax-Exempt Foundation
Excerpt: "EBIA Comment: We found this advisory opinion noteworthy because it addresses issues relating to the distribution of welfare plan assets on plan termination. But given how little guidance exists on this topic, it is unfortunate that the DOL did not explain its reasoning more clearly. The opinion appears to conclude that the proposed transfer was permissible because the trust had been properly terminated and all liabilities satisfied." (Employee Benefits Institute of America)
[Official Guidance] Text of Advisory Opinion 2008-07A: Bend, Oregon, Chamber of Commerce on Offering Fully Insured Benefits to Employees of Member Employers
Excerpt: "[The DOL was asked w]hether a proposed arrangement offered by the Chamber of Commerce in Bend, Oregon would be a multiple employer welfare arrangement (MEWA) within the meaning of section 3(40) of ERISA, and whether such an arrangement would itself be an employee welfare benefit plan within the meaning of section 3(1) of ERISA." (U.S. Employee Benefits Security Administration)
[Guidance Overview] New ERISA Reporting and Disclosure Rules and Guidance Appear to Favor VCOC/REOC Compliance Over 25% Test Reliance (PDF)
3 pages. Excerpt: "One surprising aspect of these new rules is that they appear to apply to investment funds that rely on the '25% Test' for their exemption from ERISA, while investment funds that qualify as 'venture capital operating companies' ('VCOCs') or 'real estate operating companies' ('REOCs') are specifically exempt from these rules." (Paul, Hastings, Janofsky & Walker LLP)
[Guidance Overview] IRS Issues Minimum Required Contribution Rules for Defined Benefit Plans (PDF)
5 pages. Excerpt: "WHO'S AFFECTED These developments affect sponsors of qualified single-employer, multiple employer and multiemployer defined benefit plans. They do not affect governmental plans or church plans that do not elect to be covered by ERISA ('non-electing church plans')." (Prudential Retirement)
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