In Advisory Opinion 2011-01A, the DOL addressed whether the Custom Rail Employer Welfare Trust Fund (CREW) is a fully insured multiple employer welfare arrangement (MEWA) for purposes of ERISA. If a MEWA is not fully insured, any state law that regulates insurance applies to the MEWA to the extent the law is not inconsistent with ERISA. A fully insured MEWA is subject to significantly less state regulation.
The DOL determined that CREW is not fully insured. The DOL stated that to be considered "fully insured" within the meaning of ERISA, all benefits provided by the MEWA must be guaranteed under an insurance policy or contract from an insurer that is licensed or admitted to conduct business under a state's group health insurance laws, and the policy must be regulated under these laws. In this case, CREW had purchased a certificate of insurance from certain underwriters at Lloyd's of London. However, the certificate did not unconditionally guarantee payment of all benefits due to participation in CREW because the underwriter's liability was subject to certain conditions. The certificate issued to CREW was not issued as group health insurance or regulated under the group health insurance laws of a state.