[Code of Federal Regulations] [Title 29, Volume 9] [Revised as of July 1, 2001] From the U.S. Government Printing Office via GPO Access [CITE: 29CFR2520.101-2] [Page 356-374] TITLE 29--LABOR CHAPTER XXV--PENSION AND WELFARE BENEFITS ADMINISTRATION, DEPARTMENT OF LABOR PART 2520--RULES AND REGULATIONS FOR REPORTING AND DISCLOSURE--Table of Contents Subpart A--General Reporting and Disclosure Requirements Sec. 2520.101-2 Annual reporting by multiple employer welfare arrangements and certain other entities offering or providing coverage for medical care to the employees of two or more employers. (a) Basis and scope. Section 101(g){h} \1\ of the Act permits the Secretary of Labor to require, by regulation, multiple employer welfare arrangements (MEWAs) providing benefits that consist of medical care (within the meaning of section 733(a)(2) of the Act), and that are not group health plans, to report, not more frequently than annually, in such form and manner as the Secretary may require, for the purpose of determining the extent to which the requirements of part 7 of the Act are being carried out in connection with such benefits. Section 734 of the Act provides that the Secretary may promulgate such regulations as may be necessary or appropriate to carry out the provisions of part 7 of the Act. This section sets out requirements for annual reporting by MEWAs that provide benefits that consist of medical care and by certain entities that claim not to be a MEWA solely due to the exception in section 3(40)(A)(i) of the Act (Entities Claiming Exception or ECEs). These requirements apply regardless of whether the MEWA or ECE is a group health plan. --------------------------------------------------------------------------- \1\ Section 1421(d)(1) of the Small Business Job Protection Act of 1996 (Pub. L. 104-188) created a new section 101(g) of ERISA relating to Simple Retirement Accounts. Subsequently, section 101(e)(1) of HIPAA also created a new section 101(g) of ERISA relating to MEWA reporting. Accordingly, when referring to section 101(g) of ERISA relating to MEWA reporting, this document cites section 101(g){h} of ERISA. --------------------------------------------------------------------------- (b) Definitions. As used in this section, the following definitions apply: Administrator means-- (1) The person specifically so designated by the terms of the instrument under which the MEWA or ECE is operated; (2) If the MEWA or ECE is a group health plan and the administrator is not so designated, the plan sponsor (as defined in section 3(16)(B) of the Act); or [[Page 357]] (3) In the case of a MEWA or ECE for which an administrator is not designated and a plan sponsor cannot be identified, the person or persons actually responsible (whether or not so designated under the terms of the instrument under which the MEWA or ECE is operated) for the control, disposition, or management of the cash or property received by or contributed to the MEWA or ECE, irrespective of whether such control, disposition, or management is exercised directly by such person or persons or indirectly through an agent, custodian, or trustee designated by such person or persons. Entity Claiming Exception (ECE) means an entity that claims it is not a MEWA due to the exception in section 3(40)(A)(i) of the Act. (In general, this exception is for entities that are established and maintained under or pursuant to one or more agreements that the Secretary finds to be collective bargaining agreements). Group health plan means a group health plan within the meaning of section 733(a) of the Act and Sec. 2590.701-2. Health insurance issuer means a health insurance issuer within the meaning of section 733(b)(2) of the Act and Sec. 2590.701-2. Medical care means medical care within the meaning of section 733(a)(2) of the Act and Sec. 2590.701-2. Multiple employer welfare arrangement (MEWA) means a multiple employer welfare arrangement within the meaning of section 3(40) of the Act. Origination means the occurrence of any of the following three events (and a MEWA or ECE is considered to have been originated when any of the following three events occurs)-- (1) The MEWA or ECE first begins offering or providing coverage for medical care to the employees of two or more employers (including one or more self-employed individuals); (2) The MEWA or ECE begins offering or providing coverage for medical care to the employees of two or more employers (including one or more self-employed individuals) after a merger with another MEWA or ECE (unless all of the MEWAs or ECEs that participate in the merger previously were last originated at least three years prior to the merger); or (3) The number of employees receiving coverage for medical care under the MEWA or ECE is at least 50 percent greater than the number of such employees on the last day of the previous calendar year (unless the increase is due to a merger with another MEWA or ECE under which all MEWAs and ECEs that participate in the merger were last originated at least three years prior to the merger). (c) Persons required to report--(1) General rule. Except as provided in paragraph (c)(2) of this section, the following persons are required to report under this section-- (i) The administrator of a MEWA that offers or provides benefits consisting of medical care, regardless of whether the entity is a group health plan; and (ii) The administrator of an ECE that offers or provides benefits consisting of medical care during the first three years after the ECE is originated. (2) Exception. Nothing in this paragraph (c) shall be construed to require reporting under this section by the administrator of a MEWA or ECE if the MEWA or ECE is licensed or authorized to operate as a health insurance issuer in every State in which it offers or provides coverage for medical care to employees. (3) Construction. For purposes of this section, the following rules of construction apply-- (i) Whether or not an entity is a MEWA or ECE is determined by the administrator acting in good faith. Therefore, if an administrator makes a good faith determination at the time when a filing under this section would otherwise be required that the entity is maintained pursuant to one or more collective bargaining agreements, the entity is an ECE, and the administrator of the ECE is not required to file if its most recent origination was more than three years. Even if the entity is later determined to be a MEWA, filings are not required prior to the determination that the entity is a MEWA if at the time the filings were otherwise due, the administrator made a good faith determination that the entity was an ECE. However, filings are required for years after the determination that the entity is a MEWA. [[Page 358]] (ii) In contrast, while an administrator's good faith determination that an entity is an ECE may eliminate the requirement that the administrator of the entity file under this section for more than three years after the entity's origination date, the administrator's determination, nonetheless, does not affect the applicability of State law to the entity. Accordingly, incorrectly claiming the exception may eliminate the need to file under this section, if the claiming of the exception is done in good faith. However, the claiming of the exception for ECEs under this filing requirement does not prevent the application of State law to an entity that is later determined to be a MEWA. This is because the filing, or the failure to file, under this section does not in any way affect the application of State law to a MEWA. (d) Information to be reported. (1) The annual report required by this section shall consist of a completed copy of the Form M-1 ``Annual Report for Multiple Employer Welfare Arrangements (MEWAs) and Certain Entities Claiming Exception (ECEs)'' (Form M-1) and any additional statements required in the instructions to the Form M-1. This report is available by calling 1-800-998-7542 and on the Internet at http:// www.dol.gov/dol/pwba. (2) The Secretary may reject any filing under this section if the Secretary determines that the filing is incomplete, in accordance with Sec. 2560.502c-5. (3) If the Secretary rejects a filing under paragraph (d)(2) of this section, and if a revised filing satisfactory to the Secretary is not submitted within 45 days after the notice of rejection, the Secretary may bring a civil action for such relief as may be appropriate (including penalties under section 502(c)(5) of the Act and Sec. 2560.502c-5). (e) Timing--(1) Period to be Reported. A completed copy of the Form M-1 is required to be filed for each calendar year during all or part of which the MEWA or ECE offers or provides coverage for medical care to the employees of two or more employers (including one or more self- employed individuals). (2) Filing deadline--(i) General March 1 filing due date. Subject to the transition rule described in paragraph (e)(2)(ii) of this section, a completed copy of the Form M-1 is required to be filed on or before each March 1 that follows a period to be reported (as described in paragraph (e)(1) of this section). However, if March 1 is a Saturday, Sunday, or federal holiday, the form must be filed no later than the next business day. (ii) Transition rule for Year 2000 filings. For the year 1999 period to be reported, a completed copy of the Form M-1 is required to be filed no later than May 1, 2000. (iii) Special rule requiring a 90-Day Origination Report when a MEWA or ECE is originated--(A) In general. Subject to paragraph (e)(2)(ii)(B) of this section, when a MEWA or ECE is originated, the administrator of the MEWA or ECE is also required to file a completed copy of the Form M- 1 within 90 days of the origination date (unless 90 days after the origination date is a Saturday, Sunday, or federal holiday, in which case the form must be filed no later than the next business day). (B) Exceptions. (1) Paragraph (d)(2)(ii)(A) of this section does not apply if the origination occurred between October 1 and December 31. (2) Paragraph (d)(2)(ii)(A) of this section does not apply before May 1, 2000. Therefore, for an entity that is originated, for example, on January 1, 2000, no 90-day origination report is required. Nonetheless, for an entity originated, for example, on April 1, 2000, a 90-day origination report is required to be completed and filed no later than June 30, 2000. (iv) Extensions. An extension may be granted for filing a report if the administrator complies with the extension procedure prescribed in the Instructions to the Form M-1. (f) Filing address. A completed copy of the Form M-1 is filed with the Secretary by sending it to the address prescribed in the Instructions to the Form M-1. (g) Civil penalties and procedures. For information on civil penalties under section 502(c)(5) of the Act for persons who fail to file the information required under this section (including a transition rule applicable to filings due in the year 2000), see Sec. 2560.502c-5. For information relating to administrative [[Page 359]] hearings and appeals in connection with the assessment of civil penalties under section 502(c)(5) of the Act, see Sec. 2570.90 et seq. (h) Examples. The rules of this section are illustrated by the following examples: Example 1. (i) MEWA A began offering coverage for medical care to the employees of two or more employers July 1, 1989 (and continuous to offer such coverage). MEWA A does not claim the exception under section 3(40)(A)(i) of ERISA. (ii) In this Example 1, the administrator of MEWA A must file a completed copy of the Form M-1 by May 1, 2000. Furthermore, the administrator of MEWA A must file the Form M-1 annually by every March 1 thereafter. Example 2. (i) ECE B began offering coverage for medical care to the employees of two or more employers on January 1, 1992. ECE B has not been involved in any mergers and in 1999 the number of employees to which ECE B provides coverage for medical care is not at least 50 percent greater than the number of such employees on December 31, 1998. (ii) In this Example 2, ECE B was originated was on January 1, 1992 has not been originated since then. Therefore, the administrator of ECE B is not required to file a Form M-1 on May 1, 2000 because the last time the ECE B was originated was January 1, 1992 which more than 3 years prior to May 1, 2000. Example 3. (i) ECE C began offering coverage for medical care to the employees of two or more employers on July 1, 1998. (ii) In this Example 3, the administrator of ECE C must file a completed copy of the Form M-1 by May 1, 2000 because the last date A was originated was July 1, 1998, which is less than 3 years prior to the May 1, 2000 due date. Furthermore, the administrator of ECE C must file a year 2000 annual report by March 1, 2001 (because July 1, 1998 is less than three years prior to March 1, 2001). However, if ECE C is not involved in any mergers that would result in a new origination date and if ECE C does not experience a growth of 50 percent or more in the number of employees to which ECE C provides coverage from the last day of the previous calendar year to any day in the current calendar year, then no Form M-1 report is required to be filed after March 1, 2001. Example 4. (i) MEWA D begins offering coverage to the employees of two or more employers on January 1, 2000. MEWA D is licensed or authorized to operate as a health insurance issuer in every State in which it offers coverage for medical care to employees. (ii) In this Example 4, the administrator of MEWA D is not required to file Form M-1 on May 1, 2000 because it is licensed or authorized to operate as a health insurance issuer in every State in which it offers coverage for medical care to employees. Example 5. (i) MEWA E is originated on September 1, 2000. (ii) In this Example 5, because MEWA E was originated on September 1, 2000, the administrator of MEWA E must file a completed copy of the Form M-1 on or before November 30, 2000 (which is 90 days after the origination date). In addition, the administrator of MEWA E must file a completed copy of the Form M-1 annually by every March 1 thereafter. (i) Compliance dates--(1) Subject to paragraph (i)(2) of this section, reports filed pursuant to this reporting requirement are first due by May 1, 2000. (Therefore, on May 1, 2000, filings are due with respect to MEWAs or ECEs that provided coverage in calendar year 1999.) (2) 90-Day Origination Reports (described in paragraph (e)(2)(ii) of this section) are first due by May 1, 2000. Therefore, for an entity that is originated, for example, on January 1, 2000, no 90-day origination report is required. Nonetheless, for an entity originated, for example, on April 1, 2000, a 90-day origination report is required to be completed and filed no later than June 30, 2000. [[Page 360]] [GRAPHIC] [TIFF OMITTED] TR11FE00.000 [[Page 361]] [GRAPHIC] [TIFF OMITTED] TR11FE00.001 [[Page 362]] [GRAPHIC] [TIFF OMITTED] TR11FE00.002 [[Page 363]] [GRAPHIC] [TIFF OMITTED] TR11FE00.003 [[Page 364]] [GRAPHIC] [TIFF OMITTED] TR11FE00.004 [[Page 365]] [GRAPHIC] [TIFF OMITTED] TR11FE00.005 [[Page 366]] [GRAPHIC] [TIFF OMITTED] TR11FE00.006 [[Page 367]] [GRAPHIC] [TIFF OMITTED] TR11FE00.007 [[Page 368]] [GRAPHIC] [TIFF OMITTED] TR11FE00.008 [[Page 369]] [GRAPHIC] [TIFF OMITTED] TR11FE00.009 [[Page 370]] [GRAPHIC] [TIFF OMITTED] TR11FE00.010 [[Page 371]] [GRAPHIC] [TIFF OMITTED] TR11FE00.011 [[Page 372]] [GRAPHIC] [TIFF OMITTED] TR11FE00.012 [[Page 373]] [GRAPHIC] [TIFF OMITTED] TR11FE00.013 [[Page 374]] [GRAPHIC] [TIFF OMITTED] TR11FE00.014 [65 FR 7163, Feb. 11, 2000] [[Page 375]]