On November 14, the Office and Management and Budget received from the DOL a proposed rule which would broaden the definition of employer under ERISA to allow more businesses to join association health plans.
This was in response to the Oct. 12 executive order which directed the DOL to “consider expanding the conditions that satisfy the commonality‑of-interest requirements under current Department of Labor advisory opinions interpreting the definition of an “employer” under section 3(5) of the Employee Retirement Income Security Act of 1974.”
The DOL’s advisory Opinion on MEPs in 2012 was specifically premised on the DOL’s interpretation of the definition of “employer,” for health plan (MEWA) purposes. The DOL ‘s position was that it had no authority to redefine their historical definition of employer it developed for MEWA purposes merely for retirement plan purposes, that it was bound by the statute to apply the same “employer” definition to both health plans and retirement plans. Does this mean that the new proposed definition of “employer” will, necessarily, by operation of statute, be expanded for retirement plan purposes as well? If this is the case, MEPS would be opened up to unrelated employers under the same set of circumstances as they would for health plan purposes.
No one has seen the specific language of the proposed regulation, of course. But it would seem that the DOL (in its own collective mind) really has no authority to expand the definition of “employer” for ACA/Association Health plan purposes without also expanding it for retirement plans.
We will watch closely for this new proposed reg when it is published. But it’s hard to see how this would not also apply to retirement plans, and thereby opening up MEPS. Even if the language of the proposed reg is limited to health plans, there will be an opportunity under the comment process to make the case that there, legally, can be no difference-at least according to the DOL’s own rules….