Paging Anyone with Knowledge of MEWAs under Tennessee Laws

[spencerhastings]

Background: Client is in the middle of selling a division and will be keeping those employees in it's medical plan for the rest of the year to avoid disruption, thus creating a self-insured MEWA with two employers for this short period. 

I'm trying to determine the potential risks and requirements of keeping these employees in the plan for the rest of the year under Tennessee law.  So far I've found the applicable rules and regulations (Tenn. Comp. R. & Regs. 0780-01-76), but I'm a little confused as to if these regs apply to a two employer MEWA because 1) the regs say they apply to "self-insured qualified" MEWAs and 2) then go on to define a qualified MEWA as consisting of ten employers.  

Anyone have any insight here?  Would really appreciate it - feel like I'm just spinning my wheels at this point. 

[leevena]

I read the regulations and have 2 thoughts for you.  The first is you should hire a benefits attorney, creating a MEWA to solve this problem is highly unusual.  The second is you should discuss this with the current plans’ underwriters/vendors (if you have not already) and make sure they are willing to go along with this idea.  I assume the contracts are issued to the company selling the division and the sold division would essentially have no coverage.

This not the best forum to discuss this, too many questions and not enough info.  There is a member here, Chaz, and he is a good source for many things.

[Chaz]

Thanks for the kind words.

I entirely agree that the original poster would be best served by engaging benefits counsel, particularly one familiar with Tennessee's MEWA law.

[EB Counsel]

The issue you are describing is creating an "inadvertent MEWA."  There are potential issues at both the federal and state level with respect to this arrangement.  Often state law does not directly address this type of MEWA arrangement; therefore, further analysis and often discussion with the state DOI is required.

Depending upon the type of transaction that resulted in the sale, there are different options for continuing group health plans. 

I agree with the commenters above that you should consult with an employee benefits attorney very soon to determine potential exposure, and explore the best option for your client.   

[spencerhastings]

Thank you everyone!  I very much appreciate your input. 

[Al Holifield]

• Spencer,

I am an employee benefit attorney who works with MEWAs in Tennessee.  Please call me if you want to discuss this further -  (865) 566-0115.  I am out of the office today, but will be in the office tomorrow.

Al

[healthattorneyLR]

Look into inadvertent MEWA as mentioned above - it is best to avoid it.  Legal risks definitely outweigh the desire to avoid employee disruption.  Haynes Benefits, PLC is a good firm for this type of work and represents some TN MEWAs.  

[Douglas Dahl]

Please update this thread with any unique issue in the state of TN.  I work on MEWA issues regularly, often in the context of M&A.  Sellers that agree to provide transition services (including benefits) for a transition period often assume the risk of a temporary MEWA.  If anyone is aware of particular states going after this type of temporary MEWA, please let us know.  Thanks!

[pr2222]

I believe there is an exception for an inadvertent MEWA for a short period of time under Federal law but the state law may not have this short term exception.