Proposed Revision of the Form M-1
Federal Register, Volume 76 Issue 234 (Tuesday, December 6, 2011)
[Federal Register Volume 76, Number 234 (Tuesday, December 6, 2011)]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-30920]
Federal Register / Vol. 76, No. 234 / Tuesday, December 6, 2011 /
DEPARTMENT OF LABOR
Employee Benefits Security Administration
Proposed Revision of the Form M-1
AGENCY: Employee Benefits Security Administration, Department of Labor.
ACTION: Notice of proposed form revisions.
SUMMARY: This document announces proposed revisions to the Form M-1,
Report for Multiple Employer Welfare Arrangements (MEWAs) and Certain
Entities Claiming Exception (ECEs). The revisions can be viewed on the
Employee Benefits Security Administration's (EBSA) Web site at
www.dol.gov/ebsa. The proposed form is substantively different from
previous versions of the Form M-1 and may not be used for filing
purposes. Elsewhere in this edition of the Federal Register, EBSA is
publishing a Notice of Proposed Rulemaking. Those rules would amend the
existing MEWA regulations to implement the registration requirement
added to section 101(g) of Title I of the Employee Retirement Income
Security Act of 1974, (ERISA), as amended by the Patient Protection and
Affordable Care Act (Affordable Care Act) as well as to enhance
compliance, enforcement, and protection of employer-sponsored health
benefits. The proposed form and the accompanying instructions would
facilitate the filing requirements for MEWAs under ERISA.
DATES: Written comments on the Form M-1 and Instructions should be
submitted to the Department of Labor on or before March 5, 2012.
ADDRESSES: Written comments may be submitted to the address specified
below. All comments will be made available to the public. WARNING: Do
not include any personally identifiable information (such as name,
address, or other contact information) or confidential business
information that you do not want publicly disclosed. All comments may
be posted on the Internet and can be retrieved by most Internet search
engines. Comments may be submitted anonymously.
Department of Labor. Comments to the Department of Labor,
identified by RIN 1210-AB51, by one of the following methods:
Federal eRulemaking Portal: http://www.regulations.gov.
Follow the instructions for submitting comments.
Mail or Hand Delivery: Office of Health Plan Standards and
Compliance Assistance, Employee Benefits Security Administration, Room
N-5653, U.S. Department of Labor, 200 Constitution Avenue NW.,
Washington, DC 20210, Attention: RIN 1210-AB51; Revision of Form M-1.
Comments received by the Department of Labor will be posted without
change to http://www.regulations.gov and http://www.dol.gov/ebsa, and
made available for public inspection at the Public Disclosure Room, N-
1513, Employee Benefits Security Administration, 200 Constitution
Avenue NW., Washington, DC 20210.
FOR FURTHER INFORMATION CONTACT: Kevin Horahan or Suzanne Bach, Office
of Health Plan Standards and Compliance Assistance, at (202) 693-8335.
This is not a toll-free number.
The Health Insurance Portability and Accountability Act of 1996
(Pub. L. 104-191, 110 Stat. 1936) (HIPAA) amended ERISA to provide for,
among other things, improved portability and continuity of health
insurance coverage. HIPAA also added section 101(g) to ERISA, 29 U.S.C.
1021(g), providing the Secretary with the authority to require, by
regulation, annual reporting by MEWAs that are not ERISA-covered plans.
The Patient Protection and Affordable Care Act (Affordable Care Act),
Public Law 111-148, 124 Stat. 119 (2010), amended section 101(g) of
ERISA to require that such MEWAs register with the Department prior to
operating in a State. Specifically, this section now provides that the
Secretary shall, by regulation, require multiple employer welfare
arrangements providing benefits consisting of medical care (within the
meaning of section 733(a)(2) of ERISA, 29 U.S.C. 1191b(a)(2)) which are
not ERISA-covered group health plans to register with the Secretary
prior to operating in a State and may, by regulation, require such
multiple employer welfare arrangements to report, not more frequently
than annually, in such form and such manner as the Secretary may
require for the purpose of determining the extent to which the
requirements of part 7 of subtitle B of title I of ERISA are being
carried out in connection with such benefits.
The term ``multiple employer welfare arrangement'' is defined in
section 3(40) of ERISA, 29 U.S.C. 1002(40) in pertinent part, as an
employee welfare benefit plan, or any other arrangement (other than an
employee welfare benefit plan), which is established or maintained for
the purpose of offering or providing medical benefits to the employees
of two or more employers (including one or more self-employed
individuals), or to their beneficiaries, except that such term does not
include any such plan or other arrangement which is established or
maintained under or pursuant to one or more agreements which the
Secretary finds to be collective bargaining agreements, by a rural
electric cooperative, or by a rural telephone cooperative association.
For purposes of this definition, two or more trades or businesses,
whether or not incorporated, shall be deemed a single employer if such
trades or businesses are within the same control group. The term
``control group'' means a group of trades or businesses under common
control, and the determination of whether a trade or business is under
``common control'' with another trade or business shall be determined
under regulations of the Secretary applying principles similar to the
principles applied in determining whether employees of two or more
trades or businesses are treated as employed by a single employer under
section 4001(b) of ERISA, 29 U.S.C. 1301(b), except that, for purposes
of this paragraph, common control shall not be based on an interest of
less than 25 percent.\1\
\1\ This provision was added to ERISA by section 302(b) of the
Multiple Employer Welfare Arrangement Act of 1983, Public Law 97-
473, 96 Stat. 2611, 2612 which also amended section 514(b) of ERISA,
29 U.S.C. 1144(a). Section 514(a) of ERISA provides that state laws
that relate to employee benefit plans are generally preempted by
ERISA. Section 514(b) sets forth several exceptions to the general
rule of section 514(a) and subjects employee benefit plans that are
MEWAs to various levels of state regulation depending on whether the
MEWA is fully insured. Sec. 302(b), Public Law 97-473, 96 Stat.
2611, 2613 (29 U.S.C. 1144(b)(6)).
In 2000, the Department published an interim final rule
implementing the MEWA reporting requirement. 65 FR 715 (Feb. 11, 2000).
The interim final rule generally required the administrator of a MEWA,
whether or not an ERISA-covered group health plan (and certain other
entities that offer or provide health benefits to the employees of two
or more employers) to file the Form M-1 with the Secretary. The purpose
of this form is to allow the Department to determine whether the
requirements of part 7 are being met. A final rule implementing the
MEWA reporting requirement was published in the Federal Register on
April 9, 2003 at 68 FR 17494. The original reporting requirement
responded to a 1992 recommendation of the General Accounting Office
``Employee Benefits: States Need Labor's Help Regulating Multiple
Employer Welfare Arrangements,'' March 1992, GAO/HRD-92-40. In that
report, the GAO detailed a history of fraud and abuse by some MEWAs and
recommended that the Department develop a mechanism to help States
identify MEWAs. The problems pointed out in that report continued to
exist at the time of the publication of the interim final and final
reporting rules and by all accounts, as evidenced by the amendments
made by the Affordable Care Act to section 101(g) of ERISA, persist to
this day. The proposed rules published elsewhere in today's edition of
the Federal Register would amend the final rule as well as the rules
related to annual reports required of MEWAs that are group health plans
and solicit comments regarding the restructured reporting requirements.
The Affordable Care Act was enacted on March 23, 2010; the Health
Care and Education Reconciliation Act (the Reconciliation Act), Public
Law 111-152, 124 Stat. 1029, was enacted on March 30, 2010. The
Affordable Care Act and the Reconciliation Act reorganize, amend, and
add to the provisions in part A of title XXVII of the Public Health
Service Act (PHS Act), 42 U.S.C. 300gg-1 et seq., relating to group
health plans and health insurance issuers in the group and individual
markets. The term ``group health plan'' includes both insured and self-
insured group health plans.\2\ The Affordable Care Act adds section
715(a)(1) to ERISA, 29 U.S.C. 1185d(a)(1), and section 9815(a)(1) to
the Internal Revenue Code (the Code), 26 U.S.C. 9815(a)(1), to
incorporate the provisions of part A of title XXVII of the PHS Act into
ERISA and the Code, and make them applicable to group health plans, and
health insurance issuers providing health insurance coverage in
connection with group health plans. The PHS Act sections incorporated
by this reference are sections 2701 through 2728. PHS Act sections 2701
through 2719A are substantially new, though they incorporate some
provisions of prior law. PHS Act sections 2722 through 2728 are
sections of prior law renumbered, with some, mostly minor, changes.
Section 1251 of the Affordable Care Act, as modified by section 10103
of the Affordable Care Act and section 2301 of the Reconciliation Act,
42 U.S.C. 18011, specifies that certain plans or coverage existing as
of the date of enactment (i.e., grandfathered health plans) are only
subject to certain provisions. The Affordable Care Act amended section
101(g) of ERISA to require MEWAs that provide benefits consisting of
medical care (within the meaning of section 733(a)(2) of ERISA) which
are not group health plans to register with the Secretary prior to
their operating in a State, in addition to reporting annually regarding
their compliance with part 7 of ERISA including the PHS Act market
reforms incorporated by reference in section 715 of ERISA. The Notice
of Proposed Rulemaking published elsewhere in today's Federal Register
implements the 101(g) MEWA registration mandate which requires MEWAs to
report compliance with the part 7 rules including the PHS Act sections
2701 through 2728.
\2\ The term ``group health plan'' is used in title XXVII of the
PHS Act, part 7 of ERISA, and chapter 100 of the Code, and is
distinct from the term ``health plan'', as used in other provisions
of title I of the Affordable Care Act. The term ``health plan'' does
not include self-insured group health plans.
In addition to the relevant provisions of HIPAA and the Affordable
Care Act, other laws are also set forth in part 7 with which MEWAs must
annually report compliance. The Mental Health Parity Act of 1996 (Title
VII of Pub. L. 104- 204, 110 Stat. 2944)) (MHPA) amended ERISA to
provide parity in the application of annual and lifetime dollar limits
for certain mental health benefits with such dollar limits on medical
and surgical benefits. The Paul Wellstone and Pete Domenici Mental
Health Parity and Addiction Equity Act of 2008 (Div. C, Subtitle B of
Pub. L. 110-343, 122 Stat. 3765) amended ERISA by expanding the MHPA
rules to include parity for substance use disorders benefits. 29 U.S.C.
1185a. It also required parity in financial requirements and treatment
limitations. The Newborns' and Mothers' Health Protection Act of 1996
(Title VI of Pub. L. 104-204, 110 Stat. 2935) amended ERISA to provide
new protections for mothers and their newborn children with regard to
the length of hospital stays in connection with childbirth. 29 U.S.C.
1185. The Women's Health and Cancer Rights Act of 1998 (Title VII of
Pub. L. 105-277, 112 Stat. 2681-436) amended ERISA to provide
individuals new rights for reconstructive surgery in connection with a
mastectomy. 29 U.S.C. 1185b. The Genetic Information Nondiscrimination
Act of 2008 (Pub. L. 110-233, 122 Stat. 881) amended ERISA to prohibit
the use of genetic information to adjust group premiums or
contributions, prohibit the collection of genetic information, and
prohibit requesting individuals to undergo genetic testing. 29 U.S.C.
1182. Michelle's Law (Pub. L. 110-381, 122 Stat. 4081 (2008)) amended
ERISA to prohibit group health plans and issuers from terminating
coverage for a dependent child, whose enrollment in the plan requires
student status at a postsecondary educational institution, if the
student status is lost as a result of a medically necessary leave of
absence. 29 U.S.C. 1185c.
II. Discussion of the Proposed Revisions
A. Proposed Regulatory Amendments
The Department is simultaneously publishing a Notice of Proposed
Rulemaking in today's Federal Register that, upon adoption, would amend
the existing Form M-1 requirements under Sec. 2520.101-2, propose
implementation of new registration requirements enacted by the
Affordable Care Act, and propose amendments to the Department's annual
reporting regulations to strengthen the Form M-1 requirements for all
MEWAs. The new registration requirement is an important new enforcement
tool to help Federal and State regulators better identify and monitor
MEWAs and gives the Secretary authority to collect additional
information than had been collected in previous versions of the Form M-
1, including custodial and financial information. To reflect the
proposed regulatory amendments to the Form M-1 reporting requirements,
the Department is proposing the following revisions.
B. Overview of Form Revisions
This document announces the availability of the proposed revisions
to the Form M-1, Form for Multiple Employer Welfare Arrangements
(MEWAs) and Certain Entities Claiming Exception (ECEs), for comment.
The proposed revisions to the Form M-1 may be viewed on EBSA's Web site
at http://www.dol.gov/ebsa. The proposed revisions result in a Form M-1
that is substantially different from previous versions of the Form M-1.
Part I of the proposed Form M-1 was revised to implement the new
statutory and proposed regulatory requirements that MEWAs must register
with the Department prior to operating in a State. Filers would be
required to indicate the type of filing entity (i.e. plan MEWA, non-
plan MEWA, or an ECE) and the type of filing being submitted (i.e.
annual report, registration, origination, or request for extension).
Part II of the proposed Form M-1 would require more extensive
custodial and financial information than requested in previous versions
of the Form M-1. In addition to providing information regarding the
entity's administrator and entity sponsor, the
Form M-1 would require an entity to report individuals associated with
the entity as follows: agent for service of process or registered
agent; members of the Board, officers, trustees, custodians; promoters
and/or agents responsible for marketing; any person, financial
institution or other entity holding assets; any actuaries providing
services; any third party administrator (TPA) with whom the MEWA or ECE
has a contract with; any person or entity that has authority or control
over the assets of the MEWA or ECE or over assets paid to the entity by
plans or employers for the provision of benefits; any person or entity
that has discretionary authority control, or responsibility with
respect to the administration of the MEWA or ECE or any benefit program
offered by it; and information regarding any merger with another filing
entity. Additionally, the proposed Form M-1 would require the filing
entity to respond to several ``yes or no'' questions with respect to
the entity's assets and the fiduciaries responsible for those assets.
Part II of the proposed Form M-1 includes information previously
contained in Part III of the Form M-1 and includes several
modifications which capture information regarding entities that are
operating in a State. Pursuant to the definition of ``operating'' in
the proposed regulations published elsewhere in today's edition of the
Federal Register, these modifications may apply to entities that are
not actively providing coverage.
The information collected in Part III of the proposed Form M-1
(previously designated as Part IV) remains generally unchanged, except
information regarding legal proceedings is now included in Part II.
Corresponding changes were also made to the Form M-1 Instructions
including the line-by-line instructions to reflect these revisions to
the Form M-1. More details on filing requirements are available in the
Notice of Proposed Rulemaking published elsewhere in this edition of
the Federal Register. The Self Compliance Tool, which may be used to
help assess an entity's compliance with part 7 of ERISA, will continue
to be included in the Form M-1 instructions. The current version of
that document is available at http://www.dol.gov/ebsa. The Self
Compliance Tool undergoes changes to reflect the current provisions of
part 7 as they become effective. While we are accepting comments on the
Form M-1 and the Instructions, which include the Self-Compliance tool,
please refrain from commenting on the portion of the instructions
referencing the Self Compliance Tool in that regard.
III. Paperwork Reduction Act Statement
According to the Paperwork Reduction Act of 1995 (Pub. L. 104-13)
(PRA), no persons are required to respond to a collection of
information unless such collection displays a valid OMB control number.
The Department notes that a Federal agency cannot conduct or sponsor a
collection of information unless it is approved by the Office of
Management and Budget (OMB) under the PRA, and displays a currently
valid OMB control number, and the public is not required to respond to
a collection of information unless it displays a currently valid OMB
control number. See 44 U.S.C. 3507. Also, notwithstanding any other
provisions of law, no person shall be subject to penalty for failing to
comply with a collection of information if the collection of
information does not display a currently valid OMB control number. See
44 U.S.C. 3512.
This notice would revise the information collection request (ICR)
titled the ``Annual Report for Multiple Employer Welfare Arrangements
(Form M-1) approved by OMB under OMB Control Number 1210-0116, which
currently is scheduled to expire on March 31, 2013. For the hour and
cost burden associated with this revision, please see the proposed
regulation titled ``Filings Required of Multiple Employer Welfare
Arrangements and Certain Other Entities that Offer or Provide Coverage
for Medical Care to the Employees of Two or More Employers,'' which is
published elsewhere in today's issue of the Federal Register.
Statutory Authority: 29 U.S.C. 1021-1024, 1027, 1029-31, 1059,
1134 and 1135; Secretary of Labor's Order 3-2010, 75 FR 55354
(September 10, 2010). Sec. 2520.101-2 also issued under 29 U.S.C.
1181-1183, 1181 note, 1185, 1185a-d, and 1191-1191c. Sec. 2520.103-1
also issued under 26 U.S.C. 6058 note. Sec. 2520.101-6 also issued
under Sec. 502(a)(3), 120 Stat. 780, 940 (2006); Secs. 2520.102-3,
2520.104b-1 and 2520.104b-3 also issued under 29 U.S.C. 1003, 1181-
1183, 1181 note, 1185, 1185a-d, 1191, and 1191a-c. Secs. 2520.104b-1
and 2520.107 also issued under 26 U.S.C. 401 note, 111 Stat. 788.
Sec. 2520.101-3 is also issued under 29 U.S.C. 1021(i).
Signed at Washington, DC this 28th day of November, 2011.
Phyllis C. Borzi,
Assistant Secretary, Employee Benefits Security Administration.
[FR Doc. 2011-30920 Filed 12-5-11; 8:45 am]
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