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What is a MEWA?

“MEWA” stands for “multiple employer welfare arrangement.” A MEWA is formed when a health and welfare plan provides benefits to employees of two or more employers that are not part of the same controlled group of businesses. See, e.g., [Addressing the Risks of Related Employer Status for Benefit Plan Purposes:]. 


In some cases, the formation of MEWA is intentional, such as when employers in a professional trade or business association join together so that they can obtain group insurance benefits at better prices than they could as individual small employers. In other cases, a MEWA is formed unintentionally when a sponsoring employer is not aware that another employer who is participating in the same health and welfare plan is not in their controlled group, or the significance of what that means. This could happen, for example, where businesses have some co-ownership, but not enough to be considered a “controlled group” or where the owner of a company dies and shares are distributed to beneficiaries.


The importance of recognizing that a MEWA exists is that MEWAs have special compliance requirements, and the consequences of non-compliance can be significant, so this is of particular concern where an employer has established an unintentional MEWA and is not aware of the special compliance requirements.


Special Requirements:

  • Multiple Form 5500 filings may be required for each participating employer group

  • Annual Form M-1 Filing is required for MEWAs that provide medical care

  • Each state in which the MEWA operates may have additional requirements

  • Self-Insured MEWAs may be subject to insurance regulatory requirements in each state in which it is operated

  • Insurers in some states may decline to issue policies to MEWAs, or raise rates due to the change in status from a single employer plan

  • A trust may be required to hold plan assets


Language in wrap documents should be reviewed


Consequences of Non-Compliance:

  • May need to file amended Form 5500s

  • May need to file late Form M-1s for all years not filed. Penalties of up to $1,527 per day for each failure (adjusted from time to time for inflation). Consult with counsel if late M-1s are needed as there is no formal voluntary late filing program for these filings

  • Raises issues of insurance coverage

  • Fiduciaries may be individually liable for mishandling of plan assets

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