Labor Department Proposes Rules For Collectively Bargained Welfare Plans

Archived News Release — Caution: Information may be out of date.

The U. S. Department of Labor today published proposed rules for determining whether an employee welfare benefit plan is collectively bargained and therefore is exempt from state regulations governing multiple employer welfare arrangements (MEWAs).

The proposed rules are intended to alleviate problems created by certain MEWA operators who attempt to avoid state insurance regulation by falsely claiming that MEWA is a collectively bargained plan. In 1983, Congress amended the Employee Retirement Income Security Act (ERISA) to clarify the ability of states to require MEWAs to comply with certain state insurance laws. The amendments specifically excepted from the MEWA definition welfare plans that the Secretary of Labor finds to be established or maintained pursuant to one or more collective bargaining agreements.

The proposed rules being published today were developed through a negotiated rulemaking process by the ERISA Section 3(40) Negotiated Rulemaking Advisory Committee. The advisory committee is comprised of both public and private sector representatives, including representatives of state insurance commissioners and organized labor. The advisory committee, created by the department in September 1998, developed a consensus and drafted suggested text for developing the proposed regulation.

The proposed rule sets forth specific criteria and factors that if satisfied would constitute a finding by the Secretary of Labor that a plan is established or maintained pursuant to one or more collective bargaining agreements. A separate proposed rule, also published today, describes when a party may obtain, and the procedures for, an administrative hearing on whether a plan is maintained pursuant to a collective bargaining agreement for purposes of ERISA section 3(40).

Written comments on the proposed regulations should be submitted by Dec. 26, 2000 to the Pension and Welfare Benefits Administration, Room N-5669, U. S. Department of Labor, 200 Constitution Ave., N.W., Washington, D. C. 20210, (Attention: Proposed Regulation Under Section 3(40)).

The proposed regulations are scheduled to be published in the Oct. 27 Federal Register.

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Archived News Release — Caution: Information may be out of date.