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Union Sponsored Health Plan - Is this a MEWA?

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A local union wants to establish/sponsor a medical plan for its members as an alternative to the high cost medical plan being offered by the multiemployer welfare plan that the union members are participating in. The plan will not be collectively bargained.

1. Is this a MEWA? And, if so, what exactly are the ramifications of that? (I know almost nothing about MEWAs!)

2. If they can sponsor the medical plan, will it be considered a group health plan that can be integrated with the HRA being offered under the multiemployer plan?

Any insights are appreciated!

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  • 8 months later...

The real question is whether or not the plan is created pursuant to a CBA. You have already acknowledged that it is not. What are the chances of having it written into the CBA on the next go-around? It the local doing this against the wishes/policy of its national union? If so, they are in dangerous territory. That is tantamount to trying to break off from the national union.

1. For now, the plan definitely would be a MEWA in that it would cover employees of multiple unrelated employers. This means that it is acting as an insurance company and would have to be licensed to provide such coverage by the states in which it is operating. Several states would require full insurance company licensing, while others have relaxed licensing requirements for MEWAs. If they are operating in a single, MEWA state, it may be doable. If not it is likely prohibitively expensive to undertake.

[Note: MEWAs must comply with both US Department of Labor requirements as well as state laws.]

2. Yes, it could be integrated with the multi-employer HRA.

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