Form M-1 is a critically important filing designed to protect consumers against MEWA fraud by collecting information about the MEWA’s compliance with certain federal health coverage requirements, including HIPAA, the Mental Health Parity and Addiction Equity Act (MHPAEA), the Newborns’ and Mothers’ Health Protection Act (NMHPA), the Women’s Health and Cancer Rights Act (WHCRA), the Genetic Information Nondiscrimination Act (GINA), and certain mandates under the ACA.
The Form M-1 also collects information about individuals and organizations responsible for:
- Sponsoring or managing operations of MEWAs that offer medical benefits.
- Providing services—such as benefits administration or actuarial and asset management services—to a MEWA that offers medical care benefits.
Administrators of MEWAs and AHPs that offer health benefits must submit a Form M-1 electronically to the Department of Labor by March 1 each year and in certain instances that require it, including:
- A new MEWA begins operations (30 days prior),
- An existing MEWA expands operations to an additional state (30 days prior)
- Two or more MEWAs merge (within 30 days)
- The number of covered employees increases by 50 percent or more (within 30 days)
- The MEWA experiences a material change to its custodial or financial information (within 30 days)
Failure to register on time or to file a complete, accurate, and timely Form M-1 is a red flag. Generally, no one should be marketing, operating, or administering a MEWA that offers medical care benefits, unless it has filed an M-1.
In addition, a MEWA must submit a Form M-1 for the following events:
This filing requirement applies regardless of plan size or type of MEWA funding-that is, fully insured or self-insured.
A MEWA is any arrangement that offers or provides welfare benefits (for example: health, disability, or life insurance benefits) to the employees of two or more employers that are not part of the same controlled group of businesses. Association Health Plans (AHPs) are a type of MEWA. A MEWA does not include an arrangement that provides welfare benefits to the employees of two or more employers if it is established or maintained:
- Pursuant to one or more collective bargaining agreements
- By a rural electric cooperative; or
- By a rural telephone cooperative association.
In most cases, MEWAs are employee welfare benefit plans that are subject to ERISA and other federal employee benefits laws, such as the Health Insurance Portability and Accountability Act (HIPAA) and the Affordable Care Act (ACA). States are also allowed to regulate MEWAs under their own insurance laws and regulations. When an AHP is treated as a single ERISA plan, all employees covered by the plan are considered when determining the insurance market rules-that is, small group or large group that apply to the plan.
Entities claiming not to be MEWAs per the exception for collectively bargained plans, called entities claiming exception (ECEs), must file the Form M-1 for the first three years after the ECE is originated.
Compliance Tip: Any business considering enrolling in coverage through an AHP can visit the DOL’s website and use the Form M-1 search tool to determine whether the AHP has appropriately registered with the DOL and made any other required M-1 filings.
To search, it helps to know the following:
- the name of the AHP
- the employer identification number (EIN) of the AHP sponsor
- the state(s) in which the AHP operates
Who Must File
The administrator of a MEWA that provides medical benefits must file the Form M-1. A MEWA’s administrator is the person designated as the administrator by the terms under which the MEWA operates. If a MEWA is a group health plan and an administrator is not designated, the plan sponsor is the administrator. If a MEWA’s administrator is not designated and a plan sponsor cannot be identified, the administrator is the person or persons responsible for the control, disposition, or management of the cash or property received by or contributed to the MEWA.
The following MEWAs are exempt from the Form M-1 filing requirement:
- MEWAs that provide coverage that consists solely of excepted benefits under HIPAA (for example, limited scope dental or vision benefits).
- MEWAs not subject to ERISA, such as governmental plans or church plans.
- MEWAs licensed or authorized to operate as health insurance issuers in every state where they offer or provide medical care to employees.
- MEWAs that provide coverage to employees of two or more trades or businesses that share a common control interest of at least 25 percent at any time during the plan year.
- MEWAs that provide coverage to employees of two or more employers due to a change in control of the businesses (i.e., merger or acquisition) that occurs for a reason other than avoiding the Form M-1 filing and is temporary in nature.
- MEWAs that provide coverage to persons excluding spouses and dependents who are not employees or former employees of the plan sponsor, such as nonemployee members of the board of directors or independent contractors, and the number of these individuals does not exceed one percent of the total number of employees or former employees covered under the arrangement.
Due Dates
If the filing deadline falls on a weekend or federal holiday, the form must be filed no later than the next business day.
A one-time extension will automatically be granted if, by the regular Form M-1 due date, a MEWA administrator electronically files a partially completed Form M-1 requesting the extension, allowing an additional 60 days to file a completed form.
Penalties
Failing to comply with the Form M-1 filing requirement may trigger substantial penalties for a MEWA administrator. For penalties assessed after Jan. 15, 2022, the maximum penalty is $1,746 per day of the failure. This maximum penalty amount is adjusted each year for inflation. The DOL has a delinquent filer voluntary compliance program for the Form 5500, but not for the Form M-1.
Under ERISA, individuals who knowingly make false statements or representations with respect to the information that must be reported on Form M-1 may be subject to criminal penalties.
DOL’s Filing Tips
The DOL provides the following compliance tips for Form M-1 reporting:
- A MEWA must file before beginning operations. A MEWA that offers medical benefits must file a Form M-1 at least 30 days before engaging in any activity including, but not limited to marketing, soliciting, providing, or offering to provide medical care benefits to a participating employer or employees, including working owners. The filer should indicate a MEWA’s first filing by checking the appropriate box on the Form M-1.
- Use the correct year Form M-1 for annual reports. If the MEWA’s plan year starts in the months July-December, select the form for the filing year that corresponds with the last day of the calendar year during which the MEWA offers or provides coverage for medical care. If the MEWA’s plan year starts in the months January-June, select the form for the filing year that corresponds with the day of the calendar year during which the MEWA starts to offer or provide coverage for medical care.
- Only MEWAs that offer or provide medical care benefits must file Form M-1. MEWAs that only offer or provide non-medical benefits (i.e., life insurance or disability benefits), should not file a Form M-1.
- MEWAs may have more than one Form M-1 filing each year no later than March 1 following any calendar year in which the MEWA operates. In addition, a MEWA must submit a Form M-1 registration filing for certain other events (see list above).
- Indicate the correct M-1 filing type. The Form M-1 asks the purpose of filing (annual, registration, origination, special). MEWAs will check only “annual” OR “registration,” whichever is applicable. ECEs are the only entities that will check “origination” or “special.”
- Complete all required information. A MEWA must provide complete identifying information (such as an EIN) and contact information for all the MEWA’s sponsors, service providers, and parties with authority or control of the MEWA or its assets.
- Include information for every state in which the MEWA operates. Form M-1 Question 17 includes a chart asking about MEWA operations by state and whether the entity is a health insurer, is fully insured, or purchases stop loss coverage. Filers must complete this question separately for every state in which the MEWA is operating, including providing answers about National Association of Insurance Commissioners (NAIC) codes of insurers or stop loss providers.
- Provide accurate insurance information. Only include the NAIC code for the insurance company providing medical insurance coverage in states where the MEWA is operating. (For example, there is no need to include the NAIC code for a provider of fully insured dental benefits.) For non-fully insured plans that have a stop loss policy, the filer should include the NAIC codes for the stop loss insurer. The DOL would not expect a fully insured MEWA to also have stop loss insurance.
- A Form 5500 may also be required. A MEWA that is also an employee benefit plan under ERISA (such as an AHP) must file both a Form M-1 and a Form 5500 Annual Return/Report. Filers should use the same EIN and name on both forms for a MEWA.
- Retain the M-1 confirmation number because it must be provided on the MEWA’s Form 5500 filing for the same plan year. Filers will receive a Form M-1 confirmation number when they complete a filing. If the MEWA is not required to file Form M-1 for a year, the administrator should include the confirmation number for its most recently filed Form M-1 on Form 5500.
