DEPARTMENT OF REGULATORY AGENCIES 
DIVISION OF INSURANCE
3 CCR 702-4
Amended REGULATION 4-2-10
REPORTING REQUIREMENTS FOR MULTIPLE EMPLOYER WELFARE ARRANGEMENTS (MEWAs)
Section 1. 	Authority
Section 2. 	Scope Applicability and Purpose
Section 3. 	ApplicabilityScope
Section 4. 	Definitions
Section 5. 	Filing Requirements of MEWAs
Section 6. 	Authorized Insurance Arrangements
Section 7. 	Producer Responsibilities
Section 8. 	Continuing Compliance
Section 9.	Enforcement
Section 10.	Severability
Section 11. 	Effective Date
Section 12. 	History
Section 1I.	Authority
This regulation is promulgated under the authority of §10-1-109, C.R.S. 
Section 2II.	Scope Basis and Purpose
Many Multiple Employer Welfare Arrangements (MEWAs) have previously claimed ERISA preemption whereby health plans may operate without obtaining a license from the Division of Insurance. Section 10-3-903.5, C.R.S., regarding the Division's jurisdiction over providers of health care benefits was effective as of March 31, 1993. This statute, as well as recent advisory opinions from the US Department of Labor, has clarified the limited nature of the federal ERISA (Employee Retirement Income Security Act) preemption. 
In addition, it has come to the Division's attention that producers who are licensed by the Colorado Division of Insurance have been involved in the sale of health plans offered by unlicensed entities. This regulation is intended to: (1) clarify the information to be filed under the provisions of §10-3-903.5(7)(c), C.R.S. by MEWAs claiming exempt status from formal licensing requirements; (2) clarify the responsibilities of licensed producers, and; (3) to repeal and replace Insurance Regulation 4-2-10 (3 CCR 702-4, pg. 122). 
Section 3.	ApplicabilityScope
This regulation applies to all multiple employer trusts subject to §10-3–903.5, C.R.S     It does not apply to the Multiple Employer Welfare Arrangement Pilot Program regulated under Colorado Insurance Regulation 4-2-25.
Section 4.III.	Definitions
A.	"Fully insured" means an arrangement where a licensed entity is liable to pay all health care benefits, less any contractual deductibles, coinsurance or copayments to be made by the enrollee. The liability of the licensed entity for payment of the covered services or benefits is directly to the individual employee, member or dependent(s) receiving the health care services or benefits. The contract issuance claims payment and administration and all other insurance related functions remain the ultimate responsibility of the licensed entity. 
B.	"Health plan" is an arrangement such as a fund, trust, plan, program or other funding mechanism which that provides health care benefits. 
C.	"Licensed entity" means a licensed insurance company; health maintenance organization; or nonprofit hospital, medical-surgical, and health service corporation having a certificate of authority to transact business in this state. 
D.	"Producer" means a licensed person as defined by Article 2 of Title 10. 
E.	"Substantial compliance" means that each benefit provided to an individual covered by a MEWA complies with the essential requirements of each mandated benefit. 
Section 5.IV.	Filing Requirements of MEWAs
A filing under this regulation by a MEWA is solely for the purpose of providing the information required to the Commissioner in order to demonstrate if a MEWA complies with the requirements of §10-3-903.5(c)(7), C.R.S. Determination of compliance or noncompliance will be provided in writing to the MEWA. 
The following information is required to be filed in order to meet the filing requirements of §10-3-903.5(7)(c), C.R.S. and for the Division of Insurance to make a determination regarding the qualification of a Multiple Employer Welfare Arrangement (MEWA) seeking exemption from licensure requirements. 
A. 	Evidence that the MEWA has existed continuously since January 1, 1983. This is accomplished by submitting copies of formation documents, bylaws, if applicable, and financial reports, audited preferred, for years 1983, 1987 and 1991. 
B. 	A copy of the sponsor association's organizational documents, membership criteria, ownership and a summary of the activities and benefits, other than health plan coverage, provided to its membership. 
C. 	A copy of the most recent financial report, which includes at a minimum, a balance sheet, income statement, cash flow report and a detailed listing of assets, as of the MEWA's most recent fiscal year end. The financial report must disclose and support the required five percent (5%) unallocated reserve level. 
D. 	The method of marketing and enrolling eligible participants. 
E. 	Actuarial information that must be prepared and signed by a qualified actuary as indicated by §10-7-114(1)(e), C.R.S. This information must include: 
1.	An copy of an opinion that: 
a). 	is prepared in a format consistent with that required, and from time to time amended, by the National Association of Insurance Commissioners for commercial health insurers.  complying with the provisions of Colorado Insurance Regulation 3-1-8 (3 CCR 702-3), and
b).	 reflecting opines on the adequacy of the health plan reserves and liabilities reflected in the financial report, and 
c).	reflecting the adequacy of the contribution and funding levels of the health plan. 
2.	A copy of the underlying actuarial report supporting such opinion, including all methods and assumptions employed. In addition, the report must evaluate the adequacy of the contribution and funding levels of the health plan for the current and immediately subsequent fiscal year. 
F. 	A copy of the products offered along with a summary of benefits and a comparison of how each benefit is in substantial compliance with the state's mandated benefit provisions. 
G. 	Such other relevant information as the Commissioner may request in order to evaluate the financial, actuarial and benefits of the health plan. 
H. 	A copy of an audited annual financial report within 150 days of the MEWA's fiscal year end. 
Items A and B above are only required to be filed once, unless materially altered. Items C through G will be required to be filed annually within sixty (60) days following the fiscal year end of the MEWA. Item H shall be filed annually as indicated. 
Section 6.V.	Authorized Insurance Arrangements
Qualifying health plans that are not subject to licensure as an insurer under Colorado law are plans which that are:
A. 	Fully insured; 
B. 	Established and maintained by a single employer; 
C. 	Established and subject to a collectively bargained agreement pursuant to §10-3-903.5-(7)(b)(II), C.R.S.; 
D. 	Established by a government entity, pursuant to §10-3-903.5(b)(I), C.R.S.; or 
E. 	Determined to be in compliance with §10-3-905.3(7)(c), C.R.S. and Section IV of this regulation. 
Pursuant to Colorado law, health plans sold to residents of Colorado are subject to Colorado law even if the master policy is issued and delivered outside of Colorado. 
Section 7.  VI. Producer Responsibilities 
No producer may solicit, advertise, market, accept an application, or place coverage for a person who resides in this state with a MEWA unless the producer first verifies that the MEWA complies with the requirements of this regulation and the provisions of §10-3-903.5, C.R.S. This is accomplished by the producer acquiring a copy of the Division's correspondence determining that the MEWA is in compliance with this regulation and the provisions of §10-3-903.5(7)(c), C.R.S. 
Lack of knowledge regarding the compliance of any organization or health plan is not a defense to a violation of this regulation. Any producer involved in the solicitation or sale of health plans through unauthorized insurers or MEWAs which are found not to be in compliance with the provisions of §10-3-903.5, C.R.S. and this regulation are subject to discipline or action including fines, suspension or revocation of their license. 
Section 8. VII. Enforcement Continuing Compliance
In the event that a MEWA ceases to qualify under Section V6 of this regulation, it will be transacting the business of insurance in the State of Colorado without a license and subject to the procedures of Parts 9 and 10 of Article 3 of Title 10, C.R.S. and the provisions of the State Administrative Procedure Act, Part 4 of Title 24, C.R.S. as applicable. Any insurer that may have issued a contract to a health plan is not exempt from the liability under its contract solely due to the unauthorized status of a health plan. 
Section 9.	Enforcement
Noncompliance with this regulation may result, after proper notice and opportunity for hearing, in the imposition of any of the sanctions made available in the Colorado statutes pertaining to the business of insurance or other laws which include the imposition of fines, issuance of cease and desist orders, and/or suspension or revocation of licenses.  Among others, the penalties provided for in § 10-3-1108, C.R.S. may be applied.
Section 10. VIII. Severability 
If any provision of this regulation or the application thereof of it to any person or circumstance is for any reason held to be invalid, the remainder of this regulation shall not be affected. 
Section 11. IX. Effective Date 
This regulation as amended shall be effective July 1, 1994 October 2, 2006. 
Section 12. 	History
Regulation 4-2-10, effective July 1, 1994.
Amended regulation effective October 2, 2006.