MEWA'a and affiliated service group

[Guest terryh123]

DOL information letter of May 24, 2004, clarifies that an affiliated service group with less than 25% common ownership is not a controlled group and thus a health plan covering the employees of members of the group would be a MEWA. I have such an affiliated service group (professional group where professionals own professional corporation and a management entity (with employees) that provides management services to the P.C.) I have obtained d-letter from IRS on 401(k) plan as to affiliated service group status and follow qualified plan rules for affiliated service group. 2003 is first year for group.

I now will file M-1 (late) for 2003 and ask for waiver of penalties. Anyone else is same boat and will you take similar approach?

What are you doing about state insurance deptartment regulation, if anything? My group operates only in one state and there is no authority to conduct a MEWA in the state. I intend to have an informal meeting with state insurance dept and get their clearance that while I technically have a MEWA, the affiliated service group walks, talks and smells like a controlled group and the state should not regulate or prohbit its self-insured health plan. It is not a health plan that is being marketed to others so I do not believe the entity is "in the business of insurance" under state insurance laws and regulations.