The U.S. Department of Labor's Employee Benefits Security Administration has proposed rules under the healthcare reform law to prevent multiple employer welfare arrangements from defrauding consumers.
MEWAs have frequently been used to defraud consumers. They let unrelated employers — usually small businesses — provide healthcare and other benefits at a lower cost than other forms of coverage. When a scam MEWA becomes insolvent, they often leave consumers with a substantial amount of unpaid medical bills.
The proposed rules call for MEWAs to follow enhanced reporting requirements so employers and workers will not be abruptly cut off from necessary healthcare. The proposed rule will also let the Labor Department shut down MEWAs that are engaged in fraud. The secretary of labor could also seize assets from a MEWA if there is probable cause that it's in "a financially hazardous condition," according to the release.
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MEWAs have frequently been used to defraud consumers. They let unrelated employers — usually small businesses — provide healthcare and other benefits at a lower cost than other forms of coverage. When a scam MEWA becomes insolvent, they often leave consumers with a substantial amount of unpaid medical bills.
The proposed rules call for MEWAs to follow enhanced reporting requirements so employers and workers will not be abruptly cut off from necessary healthcare. The proposed rule will also let the Labor Department shut down MEWAs that are engaged in fraud. The secretary of labor could also seize assets from a MEWA if there is probable cause that it's in "a financially hazardous condition," according to the release.
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