14 Va. Admin. Code § 5-415-30

Current through Register Vol. 40, No. 22, June 17, 2024

Section 14VAC5-415-30 - Establishment of self-funded multiple employer welfare arrangements

A. No person shall establish or operate a self-funded multiple employer welfare arrangement in the Commonwealth without obtaining a license from the commission. Any person may apply to the commission for a license to establish and operate a self-funded MEWA in compliance with this chapter.

B. Each application for a license shall be verified by an officer or authorized representative of the applicant, shall be in a form prescribed by the commission, and shall set forth or be accompanied by the following:

1. A copy of any basic organizational documents of the applicant, including the articles of incorporation, articles of association, trust agreement, or other applicable documents, and all amendments to those documents;

2. A copy of the bylaws, rules and regulations, or any similar document regulating the conduct of the internal affairs of the applicant;

3. The names, addresses, and official positions, and biographical information on forms acceptable to the commission of each member of the governing body and any person with authority to manage or establish policy;

4. Financial statements showing the applicant's assets, liabilities, and sources of financial support and a copy of the applicant's most recent audited financial statement completed no more than one year prior to the date of application;

5. A complete description of the plan of operation, including (i) the method of marketing the plan, (ii) a statement regarding the sources of working capital as well as any other sources of funding, and (iii) a description of any insurance, reinsurance, or alternative coverage arrangements proposed, including specific, aggregate, and terminal excess insurance or stop loss insurance;

6. A financial feasibility plan that includes (i) detailed enrollment projections; (ii) the methodology for determining premium rates to be charged during at least the first three years of operations and extending one year beyond the anticipated break-even point certified by an actuary; and (iii) a projection, along with material assumptions, of balance sheets, cash flow statements showing capital expenditures, and purchase and sale of investments and income statements on a quarterly basis for at least three years and extending one year beyond the anticipated break-even point;

7. The names, addresses, and qualifications of persons responsible for the conduct of the applicant's affairs, including any third-party administrators;

8. The names, addresses, and qualifications of persons who will solicit, negotiate, procure, or effect applications for coverage with the self-funded MEWA;

9. Copies of (i) policies providing specific, aggregate, and terminal excess insurance; (ii) fiduciary liability insurance; (iii) the bond that satisfies the requirements of ERISA; and (iv) guarantees or standby letters of credit;

10. A copy of the self-funded MEWA's Form M-1, Report for Multiple Employer Welfare Arrangements, for the applicable plan year;

11. A signed attestation confirming that:

a. The self-funded MEWA makes available health plans or health benefit plans that meet the requirements for health benefit plans set forth in § 38.2-3420 B 3 of the Code of Virginia;

b. The sponsoring association is a nonstock corporation formed under the Virginia Nonstock Corporation Act (§ 13.1-801 et seq. of the Code of Virginia) that has been formed and maintained in good faith for purposes other than obtaining or providing health benefits;

c. The sponsoring association does not condition membership in the association on any factor relating to the health status of an individual, including an employee of an employer member of the sponsoring association or a dependent of such an employee;

d. The sponsoring association makes any health benefit plan available to all members regardless of any factor relating to the health status of such members or individuals eligible for coverage through another member;

e. The sponsoring association does not make any health benefit plan available to any person who is not a participating employee of the association or member of the association;

f. The sponsoring association operates as a nonprofit entity under § 501(c)(5) or (c)(6) of the Internal Revenue Code;

g. The sponsoring association has been in active existence for at least five years; and

h. The guarantees or standby letters of credit comply with § 59.1-590 B 7 of the Code of Virginia; and

12. Any other information the commission may require.

14 Va. Admin. Code § 5-415-30

Derived From Virginia Register Volume 39, Issue 18, eff. 5/1/2023.

Statutory Authority: §§ 12.1-13, 38.2-223, and 38.2-3420 of the Code of Virginia.