New Jersey Commissioner Questions MEWAs Business Arrangements

Insurance Law Alert

January 29, 2019

Cynthia J. Borrelli

Cynthia J. Borrelli




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In response to federal legislation to enhance access to association health plans, the Commissioner, State of New Jersey, Department of Banking & Insurance, in October 2018 issued a Bulletin to the marketplace (https://www.state.nj.us/dobi/bulletins/blt18_13.pdf) reminding multiple employer welfare arrangements (MEWAs) that federal law does not preempt New Jersey law as it relates to the regulatory oversight of such entities, regardless of whether the MEWA was fully insured, partially insured, or self-insured. Towards that end, the Commissioner recently issued a questionnaire to all MEWAs registered in the State of New Jersey.  [LINK]  In the questionnaire, the Commissioner requests confirmation of the nature of coverages provided by MEWAs, identification of the third party administrator (TPA) who facilitated the MEWA health plan, and information to determine whether, if self-insured, a fully insured carrier is fronting coverage, and whether small employers are participating in the MEWA benefit health program.  If the employer constitutes a large employer, the questionnaire requests the identity of the members of the MEWA health benefits program.  Additionally, the Commissioner’s questionnaire requests information on (i) any stop-loss carrier providing stop-loss insurance coverage, as well as individual and aggregate attachment points; (ii) a copy of the employer application or participation request for the MEWA; (iii) a copy of an individual employee health benefits application; (iv) a copy of the summary plan description; (v) the summary of benefits coverages for each plan offered through the MEWA; and (vi) the identity of the workers’ union and an explanation as to whether all employers are required to be members.  The questionnaire also elicits the role of the workers’ union in the MEWA benefit program and inquires whether employees pay the full premium for the MEWA health benefit plan.  If employees do not pay the full premium, the percentage that employers contribute towards the MEWA health insurance plan premium must be disclosed.  If, based upon the information available on the Internet it appears that the MEWA is a single employer MEWA, the questionnaire asks for justification for the offer of health insurance through the MEWA and not through a single employer plan.  The state which is deemed the principal state for the MEWA health benefits plan must be disclosed and how the MEWA health plan benefits are provided to members not located in the principal state must be explained.  Finally, membership eligibility criteria must be explained.

The questionnaire is likely intended to support the Commissioner’s efforts to assure that illegal association and health plans are not being sold to New Jersey residents if those plans do not fully comply with the New Jersey health benefit mandates and other relevant laws.  The Bulletin signals the possibility of strict enforcement action by the Department with respect to the provision of health benefit plans outside of the traditional marketplace, whether those plans are self-funded or fully insured.

Questions should be directed to Cynthia Borrelli.