Health Plan and Independent Contractors

[Guest JDL]

If an employer sponsored health plan allows for certain independent contractors (assuming they are in fact independent contractors and not merely employees titled as such) to participate in the plan along with its employees, would the plan be considered a MEWA? ERISA Section 3(40)(A) states that a MEWA means an employee welfare benefit plan, or any other arrangement, which is established...for the purpose of...providing any benefit...(1) to the employees of two or more employers (including one or more self-employed individuals)...

Does this language mean that if an independent contractor participates in the health plan, it will be considered a MEWA? Any suggestions? Thanks!

[Ron Snyder]

Your question appears to have been ignored. I'll take a shot.

How independent are the independent contractors? I believe that if their eligibility to participate is due to their providing a triggering number of hours of service to the sponsoring employer, they would be able to participate without the plan's becoming a MEWA. If they are permitted to participate in a plan as self-employed individuals rather than as contracted employees the plan would likely be considered a MEWA.

Although the triggering number of hours may be less than 30 per week, to lower it below 20 would not likely pass the smell test.