skip to page content
Secretary of Labor Thomas E. Perez
     DOL Home > Federal Register > Notices > EBSA
EBSA Notices

Proposed Revision of the Form M-1   [12/6/2011]
[PDF]
Federal Register, Volume 76 Issue 234 (Tuesday, December 6, 2011)
[Federal Register Volume 76, Number 234 (Tuesday, December 6, 2011)]
[Notices]
[Pages 76250-76252]
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 / 
Notices

[[Page 76250]]


-----------------------------------------------------------------------

DEPARTMENT OF LABOR

Employee Benefits Security Administration

RIN 1210-AB51


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.
     Email: E-OHPSCAM-1Revisions.EBSA@dol.gov.
     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.

SUPPLEMENTARY INFORMATION: 

I. Background

    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 
(GAO). See

[[Page 76251]]

``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

[[Page 76252]]

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]
BILLING CODE 4510-29-P