Employee Benefits: States Need Labor's Help Regulating Multiple Employer Welfare Arrangements
HRD-92-40
Published: Mar 10, 1992. Publicly Released: Mar 10, 1992.
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Highlights
Pursuant to a congressional request, GAO reviewed multiple employer welfare arrangements (MEWA), an alternative to traditional insurance in which businesses pool funds to pay for benefits or buy group insurance, focusing on: (1) the nature and extent of MEWA failures to pay bills and other problems; (2) hindrances to state regulation and enforcement of MEWA; and (3) Department of Labor (DOL) actions to prevent MEWA problems, protect MEWA participants and their beneficiaries, and assist state enforcement efforts.
Recommendations
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Department of Labor | The Secretary of Labor should direct the Assistant Secretary for Pension and Welfare Benefits Administration to develop a mechanism to help states identify MEWA. |
The Health Insurance Portability and Accountability Act of 1996 authorized DOL to require certain MEWAs to file annual reports. In February 2000, DOL issued an interim final rule implementing an annual filing requirement for such MEWAs effective May 1, 2000. DOL plans to make the information they receive from MEWAs available to state insurance regulators.
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| Department of Labor | The Secretary of Labor should direct the Assistant Secretary for Pension and Welfare Benefits Administration to improve procedures to quickly answer questions about such issues as ERISA preemption and state regulatory authority, thus enabling states to more aggressively deal with problem MEWA. |
Because of limited resources, DOL plans no further action on this recommendation. DOL considers it closed.
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BeneficiariesEmployee benefit plansstate relationsFraudFringe benefitsHealth insuranceHealth insurance cost controlInsurance regulationLaw enforcementState law