Level funded MEWA not self insured? Less than one year?

[cbassociate2017]

Hello,

If a MEWA plan is level funded, can it possibly be considered fully-insured?  And if it has not existed for a year, does that give us any out from being considered a MEWA?  Seller is part of a MEWA and hasn't been in compliance with state insurance laws.

[leevena]

Wow, you have many issues here.  Let’s start with the insured/self-funded issue first.  What does the plan documents say about this?  Level funded is a relatively new term, and some people use it loosely, when I started in 1982 we called them retrospective arrangements.  But I would assume it is self-insured.

As for MEWA, there is no requirement that I know of that requires contracts to be insured, now your state may be different, but I doubt it.  So following that logic, and assuming it is self-insured, there is no need to follow state regulations because ERISA governs.

If you are trying to exit the contract early keep in mind the self-insured contract will more than likely expose you/employer to the claims costs.

Lastly, I would double check the program structure and verify that it is in fact a MEWA.  A recent innovation has been the use of a captive to fund benefits.  These captives have multiple employers participating.  

Good luck, and I am available to discuss on phone if you would like.

[David C Smith]

Definitely would say that it is not an insured plan, but it is (like other level-funded plans) a funded self-funded plan...