760 Ind. Admin. Code 1-68-2

Current through December 12, 2024

Section 760 IAC 1-68-2 - Certificate of registration

Authority: IC 27-1-34-9

Affected: IC 4-21.5-5; IC 27-1-25; IC 27-1-34; IC 27-16-2-13

Sec. 2.

(a) A MEWA may not engage in business in Indiana without first obtaining a certificate of registration from the department.

(b) To obtain a certificate of registration, a MEWA shall submit an application for a certificate of registration. The application shall be on a form prescribed by the department. The application shall be completed and submitted along with the following information:

(1) Copies of all articles, bylaws, agreements, trusts, or other documents describing the rights and obligations of employers, employees, and beneficiaries.

(2) Audited financial statements of the MEWA and a projection of the assets, liabilities, income, and expenses of the MEWA for the next twelve (12) months.

(3) Proof of a fidelity bond, which shall protect against acts of fraud or dishonesty in servicing the MEWA, covering each person responsible for servicing the MEWA in an amount equal to:

(A) the greater of ten percent (10%) of the premiums and contributions received by the MEWA; or

(B) ten percent (10%) of the benefits paid; during the preceding calendar year, with a minimum of ten thousand dollars ($10,000) and a maximum of five hundred thousand dollars ($500,000). No additional bond shall be required of a third party administrator licensed under IC 27-1-25. (4) A business plan for the MEWA, including the proposed marketing and sales plan and documents.

(5) An opinion from a qualified actuary satisfactory to the commissioner showing that the MEWA will be operated in accordance with sound actuarial principles.

(6) A certification by the applicant that the:

(A) MEWA is in compliance with all applicable provisions of the Employee Retirement Income Security Act of 1974 (29 U.S.C. Section 1001 et seq.); or

(B) applicant is exempt from the Employee Retirement Income Security Act of 1974 including the basis for the asserted exemption.

(7) Copies of the following:

(A) Plan documents.

(B) Evidence of coverage.

(C) Organizational chart illustrating all entities affiliated with the MEWA.

(D) Agreements with service providers.

(8) A statement of the costs of coverage to be charged, including an itemization of amounts for administration, reserves, and other expenses associated with operation of the MEWA.

(9) Names and addresses of the following:

(A) The association or group of employers sponsoring the MEWA.

(B) The members of the board of trustees or directors, as applicable, of the MEWA. Biographical affidavits shall be submitted on the form prescribed by the National Association of Insurance Commissioners for insurers for the following:

(i) The members of the board of trustees or directors, as applicable.

(ii) All other persons with decision making authority for the MEWA.

(C) If not an association, at least two (2) employers.

(10) The application fee required by section 17 of this rule.

(c) The commissioner shall:

(1) examine the application and documents submitted by the applicant; and

(2) have the power to:

(A) conduct any investigation the commissioner may deem necessary; and

(B) examine under oath any persons interested in or connected with the MEWA.

The commissioner may request any additional information that he or she deems relevant to the application. A certificate of registration will not be issued until the commissioner approves the MEWA's application.

(d) To meet the requirements for approval of an application for a certificate of registration, a MEWA must meet all of the following conditions:

(1) The employers in the MEWA must be members of an association or group of two (2) or more businesses in the same trade or industry, including closely related businesses that provide support, services, or supplies primarily to that trade or industry. If an association, the association must:

(A) be engaged in substantial activity for its members other than sponsorship of an employee welfare benefit plan; and

(B) have been in existence for a period of not less than two (2) years before engaging in any activities relating to the provision of employee health benefits to its members.

(2) The MEWA must be:

(A) controlled and sponsored directly by participating employers or participating employees, or both; and

(B) operated pursuant to a trust agreement by a board of trustees that:

(i) has complete fiscal control over the MEWA; and

(ii) is responsible for all operations of the MEWA.

The trustees must be owners, partners, officers, directors, or employees of employers in the MEWA. The trustees must be equitably divided through the participating employers.

(3) The MEWA must be a not-for-profit organization.

(4) Coverage under the MEWA must not be offered to persons or groups other than participating employers and, in the event of an association, the sponsoring association.

(5) The MEWA must have:

(A) within its own organization adequate facilities and competent personnel, as determined by the commissioner, to service the employee benefit plan; or

(B) contracted with a third party administrator holding a certificate of registration under IC 27-1-25.

(6) The MEWA must have applications from not fewer than two (2) employers and plan to provide similar benefits for not fewer than two hundred (200) participating employees. The annual gross premiums of or contributions to the plan must not be less than:

(A) twenty thousand dollars ($20,000) for a plan that provides only vision benefits;

(B) seventy-five thousand dollars ($75,000) for a plan that provides only dental benefits; and

(C) two hundred thousand dollars ($200,000) for all other plans.

(7) The MEWA, other than a dental or vision, or both, only MEWA, must possess a written commitment, binder, or policy for stop-loss insurance issued by an insurer authorized to do business in this state providing the following:

(A) Not less than sixty (60) days' notice to the commissioner of any cancellation or nonrenewal of coverage.

(B) Both specific and aggregate coverage with an aggregate retention of not more than one hundred twenty-five percent (125%) of the amount of expected claims for the next plan year and a specific retention amount annually determined by the actuarial report required by section 9 of this rule.

Both the specific and the aggregate coverage must require all claims to be submitted within ninety (90) days after the claim is incurred and provide a twelve (12) month claims incurred period and a fifteen (15) month paid claims period for each policy year.

(8) The contributions must be set to fund at least one hundred percent (100%) of the aggregate retention plus all other costs of the MEWA. Amounts contained in a supplemental contribution fund are considered to be contributions that may be utilized by the MEWA to satisfy this requirement.

(9) The MEWA must do the following:

(A) Establish a procedure acceptable to the commissioner for the following:

(i) Handling claims for benefits in the event of dissolution of the MEWA.

(ii) The routine handling of claims.

(B) Obtain the required bond.

(C) Be operated in accordance with sound actuarial principles.

(10) All funds of the MEWA must be held in trust in the name of the MEWA in a qualified financial institution.

(11) The MEWA's participation application and participation agreement must contain the language required by section 16 of this rule.

(e) A denial of an application shall:

(1) be in writing;

(2) specify the reasons for denial; and

(3) provide notice of the applicant's right to request a hearing.

Any request for a hearing shall be submitted within thirty (30) days of receipt of the department's denial. A final order of the commissioner is a final order subject to judicial review under IC 4-21.5-5.

(f) A MEWA in existence on January 1, 2003, shall do the following:

(1) File notice with the commissioner by July 1, 2003, of its intent to apply for an initial certificate of registration.

(2) File for its initial certificate of registration by October 1, 2003.

The MEWA may continue to conduct business until the certificate of registration is granted or denied by the commissioner.

(g) A professional employer organization as defined by IC 27-16-2-13 that maintains a self-funded health benefit plan that was registered under this rule as MEWA on July 1, 2005, and continues to comply with the provisions is deemed to be in compliance with IC 27-16 regarding its self-insured health benefit plan until the effective date of rules adopted by the commissioner regarding professional employer organizations under IC 27-16.

760 IAC 1-68-2

Department of Insurance; 760 IAC 1-68-2; filed Apr 15, 2003, 2:20 p.m.: 26 IR 3036; filed Mar 7, 2006, 2:00 p.m.: 29 IR 2187; readopted filed Nov 24, 2009, 9:35 a.m.: 20091223-IR-760090791RFA

Readopted filed 11/20/2015, 9:25 a.m.: 20151216-IR-760150341RFA

Readopted filed 11/15/2021, 8:32 a.m.: 20211215-IR-760210419RFA