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The Regulation of Multiple Employer Trusts: Past, Present & Future

Publication Title

Washington University Law Quarterly

Abstract

It can be persuasively argued that the recognized abuses in ERISA pension plans are no more severe than those appearing in welfare plans, and that welfare abuses have a significant adverse effect on millions of employees. Nevertheless, application of ERISA in this area has been hampered by several difficult issues, most of which are traceable to a lack of congressional precision in designing enforcement mechanisms specific to welfare plans, and more importantly, to inadequate coordination of state and federal responsibility in this area. This Article examines this problem by discussing the congressional, judicial and regulatory experience with one type of entity operating in the field of employee welfare benefit plans-the "multiple employer trust" (MET). Broadly defined, a MET is an arrangement through which groups of employers with small numbers of employees are brought together so that they may obtain medical coverage for the composite group as a whole at more favorable rates. This Article attempts to introduce a coherent, balanced, and, above all, comprehensive perspective on this issue. Part One examines both the economic importance of the MET as it relates to the private health care system in this country, and the general dimensions of the regulators' enforcement difficulties. Part Two traces the legal enforcement controversy on both the state and federal levels. One issue which has received little or no notice by commentators and state regulators-the difficulties of the Department of Labor (DOL) in asserting jurisdiction in this area-is examined at length. Part Three speculates about the future roles of the DOL and state insurance regulators concerning the exercise of jurisdiction over METs. This includes a discussion of the fundamental differences in approach of state and federal law. It concludes with a theoretical framework for coordinating these two legal systems, and offers some practical suggestions for improving coordination between state and federal regulators.

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