Compliance Q&A: Accidental Multiple Employer Welfare Arrangements (MEWA)

Multiple Employer Welfare Arrangements, or MEWAs, are employee welfare plans that cover employees of two or more entities not closely related enough to be considered a single employer under certain tax code rules. Many employers wish to avoid MEWA status because MEWAs are subject to increased scrutiny under state insurance regulation and additional federal reporting requirements. Because intent is not required for formation, it is possible to inadvertently create a MEWA, and these sometimes arise in the context of mergers and acquisitions, estate planning or from covering non-employees under a group medical plan.