Church welfare plans and state regulation

[Don Levit]

Are church plans that are partially self funded regulated differently than employers in the private "commercial" sector?

Would it make a difference if there was more than one church in the same denomination as to how it might be regulated by the states?

Don Levit

[Guest Danny Miller]

Several years ago, Congress enacted Public Law No. 106-244, The Church Plan Parity and Entanglement Protection Act. This Act treats church welfare plans--including health care plans, whether insured or self-insured-- as provided by a single employer (and thus not as a multiple employer welfare arrangement, or MEWA). It also provides that church welfare plans are not subject to state insurance law licensing or registration requirements, or to state insurance law solvency/insolvency rules (such as a requirement for participatation in state guaranty association funds).

This relief is available to denominational multiple employer plans.

Not sure exactly what issue you're considering, but hope this helps as a starting point for whatever it may be.

[vebaguru]

Good info. Thanks, Danny

[Don Levit]

Danny:

This is indeed good news, in more ways than one, for church groups.

Thanks so much for your reply. I will be in touch with you.

Don Levit

[Don Levit]

Would the answer be different if there was a governmental plan defined in 414(d), or in ERISA 3(32)? The ERISA exemption seems to be similar for church and governmental plans.

I am working with a consortium of tax exempt colleges and universities. The chief counsel at this particular department of insurance, says that even though ERISA may exempt this consortium, it would be subject to state regulation as a MEWA.

Working with the letter of the law in this particular state, self funded MEWAs are not permitted.

This particular consortium wishes to self fund part of the benefits in a VEBA trust.

Don Levit,CLU,ChFC

[Guest Victor Deksnys]

My question is whether the state mandates as to minimum benefit requirements applies? The Parity Act took the licensing/solvency issues off the table for ERISA purposes.