Non-employee Directors in Health Plan?

[kmhaab]

Does covering non-employee directors under an employer-sponsored health plan make the plan a MEWA? Does it make a difference if the plan is fully-insured or self-insured? 

[Brian Gilmore]

I take the position that it likely creates a MEWA because otherwise there wouldn't be a special Form M-1 carve out where the non-employee directors are less than 1% of the total number of employees covered by the MEWA.  Why would you need the carve out if there wasn't a MEWA?

However, the DOL has not definitively opined to my knowledge, so there is at least some gray area.

Note that a number of states prohibit self-insured MEWAs--which raises the stakes considerably if the plan is not fully insured.

I posted a summary on this issue here a few years ago: https://www.theabdteam.com/blog/board-members-employee-benefits-2/

[Luke Bailey]

kmhaab, I agree with Brian Gilmore, but I see this a lot if the coverage is fully insured. At least in Texas major carriers actually write employer group coverage that includes directors and independent contractors in the definition of "employee," as long as there is at least one W-2 employee covered. I researched this and it is consistent with a specific provision of Texas insurance law. Does not seem to be contemplated by ERISA or any DOL guidance I am aware of, and could raise an interesting preemption question if there were ever a suit over coverage, but it's out there.