Exemptions For Multiple Employer Welfare Arrangements (MEWAs) From Filing and Approval Requirements for Certain Documents and Forms

Issued and entered September 10, 1997 by D. A. D'Annunzio, Acting Commissioner of Insurance

INFORMATIONAL STATEMENT ISSUED PURSUANT TO ACT 306 OF THE PUBLIC ACTS OF 1969 AS AMENDED

On February 1, 1997, Insurance Commissioner D. Joseph Olson, by means of Order No. 97-010-M, exempted several documents and forms issued by insurers from the filing and approval requirements in the Insurance Code. Order No. 97-010-M supersedes a 1981 order issued by Commissioner Baerwaldt. Multiple employer welfare arrangements (MEWAs) licensed to do business in Michigan are subject to the same form filing and approval requirements as are insurers, because MCL 500.7060 makes MEWAs subject to the requirements of chapter 22, chapter 34 and chapter 36, among others, of the Insurance Code in the same manner as an insurer authorized to transact insurance in this state. This bulletin is designed to clarify how the provisions of Order No. 97-010-M affect MEWAs.

The 1981 order issued by Commissioner Baerwaldt required the filing for prior approval of group health insurance policies containing "provisions, conditions or concepts which depart from those used by the industry in general, and which may be construed as uncommon or unusual." Because MEWAs were an uncommon or unusual vehicle for delivering group health benefits, MEWAs were required to file their group policies for prior approval. Order No. 97-010-M exempts from filing for prior approval all policy forms except certain forms specified in the order. It states "Documents and forms otherwise subject to the filing requirements in Insurance Code sections 2236, 2242, 3606 and 4430 which are not listed above are no longer required to be filed. Any filings required by other sections of the Insurance Code are unaffected by this order and continue to be subject to those filing requirements." Unusual group health policy forms are not among the forms for which filing is specified in Order No. 97-010-M, so their filing is no longer required. Consequently, the filing of master plan documents and summary plan descriptions by MEWAs is no longer required.

Order No. 97-010-M affects only form filing requirements. All other filing requirements, for example those governing rates and trust documents, are unaffected by the order.

The Bureau will continue to review select forms for compliance and, where appropriate, require prior approval of those forms in instances where the Commissioner has determined it appropriate for the protection of policyholders and the public. The Commissioner has determined that newly authorized MEWAs must submit coverage documents for prior approval during the thirty-six months immediately following the issuance of their certificate of authority.

Forms compliance reviews will occur upon the Commissioner's request, by requiring MEWAs to submit to the Bureau any or all forms which are currently in use. For this reason, each MEWA shall keep available its master plan document, summary plan description and summaries of material modification currently in use for inspection by, or to be transmitted to, the Commissioner, should that be requested.

The exemptions contained in Order No. 97-010-M change the manner in which the Insurance Bureau will review the exempt forms, but does not change a MEWA's responsibility to issue forms which comply with the requirements of Chapters 70, 20, 22, 34, 36, 40 and 44 of the Insurance Code. Failure to comply with all applicable provisions of the Code will cause a MEWA to be subject to penalties ranging from a $500 fine to suspension, limitation or revocation of its certificate of authority. MEWAs should be aware that the assignment of such penalties will be liberal to ensure continued compliance with all Code requirements.

Any questions regarding this bulletin should be directed to:

Health Benefit Plans Division
Michigan Insurance Bureau
P.O. Box 30220
Lansing, MI 48909
(517) 335-2057