Revised Regulations Related to MEWAs

On Sept. 1, 2018, the Department of Insurance issued emergency regulations related to multiple employer welfare arrangements (MEWAs). The regulations were effective upon signing and will apply to any association health plan (AHP) that that covers a Delaware resident.

A fully insured association must be licensed with the Department. In order to obtain a license, the association must submit the following to the Department:

  • Biographical information of all principals, officers, directors and trustees
  • Identification of all participating employers
  • Identification of third party administrators
  • Eligibility requirements for association membership
  • Description of association’s member benefits
  • Copy of the association’s by-laws, articles of incorporation or trust instrument
  • Copy of contracts between the association and insurers to provide health care benefits in DE
  • Any marketing or advertising materials used by the association
  • Most recent audited financial statements
  • Copy of the most recently filed Form M-1
  • Proof of minimum surplus in the amount of $500,000
  • Proof of surety bond in the amount of $500,000 to ensure the association’s obligations to health plan members
  • $1,000 filing fee

Additionally, the association must submit the following to the Department annually:

  • Proof of health insurance coverage
  • Demographic information of third party administrators
  • Notice of any changes to previously filed information (such as changes to trustees, officers, insurance coverage, plan document, by-laws, marketing material and so on)
  • Most recent audited financial statements
  • Documentation of preceding year’s and upcoming year’s annual premiums
  • Proof of a surety bond sufficient to cover at least 20% of annual premium for DE members
  • $150 filing fee

The association must:

  • Exist for at least 5 years
  • Be formed and maintained for purposes other than insurance
  • Not condition membership on any health status related factor

The member employers must be in the same industry or have their principal place of business in DE. The AHP can’t restrict membership to a particular part of the state.

The association may be rated on the collective group experience with each subscriber receiving the same community rate. The following rating factors are prohibited:

  • Age
  • Gender
  • Health status, including pre-existing conditions
  • Industry
  • Medical underwriting and screening

The AHP must provide coverage for all DE mandated benefits and essential health benefits. The coverage must be in compliance with the ACA’s cost sharing limits, prohibition on lifetime and annual dollar limits and 60 percent actuarial value.

The regulations also addressed self-insured AHPs. Until revised regulations are issued, self-insured AHPs will be subject to all of the state’s insurance requirements including licensure as an insurer, mandated benefits, financial reserves and reporting.

Emergency Regulations »