Form M-1 Reminder
A multiple employer welfare arrangement (MEWA) is subject to the annual Form M-1 reporting requirement to ensure it complies with various federal benefit laws. A MEWA refers to a plan in which two or more unrelated employers, i.e., there is no common ownership as defined by IRC Section 414 (b), (c) or (m), establish and maintain a common welfare benefit plan for the purpose of offering or providing medical benefits to their employees and their dependents.
The Department of Labor (DOL) has recently released the Form M-1 annual report for the 2013 filing year. This form can only be submitted electronically through the DOL’s Online Filing System. Generally, the Form M-1 must be filed by March 1st of each year. However for the 2013 return, the Form M-1 is due by March 3, 2014 because March 1, 2014 falls on a Saturday.
With regard to changes to the Form M-1, the 2013 form now requires filers to include custodial and financial information relating to the MEWA. In addition, there are stricter 30-day filing deadlines for MEWA registration. The Affordable Care Act (ACA) requires MEWAs to register with the Secretary of the DOL prior to operating in a state. Along with filing the annual report, MEWAs are required to file this Form within 30 days prior to operating in any state or within 30 days of expanding operations into an additional state, upon a merger, when the number of participants increases 50% or more, as well as when there is a material change to the MEWA structure.
Form M-1 Filers Now Required to File Form 5500
In December, 2013, the IRS and DOL released informational copies of the 2013 Form 5500 annual return/report and related instructions. Of particular note, the 2013 Form 5500 includes a new section called, “Form M-1 Compliance Information” that requires certain information to be completed by plans subject to the Form M-1 filing requirement. In March, 2013, the DOL issued final regulations relating to Form M-1 changes required by the ACA (see CBIZ Health Reform Bulletin, Final Rules Relating to Multiple Employer Welfare Arrangements and Form M-1, 3/8/13).
The ACA strengthens the regulation of MEWAs primarily by increasing reporting and disclosure requirements and creating a cross-reference between the Form M-1 required to be filed by MEWAs, and the Form 5500 required of plans subject to ERISA. And now, the 2013 edition of the Form 5500 is modified accordingly. Thus, all welfare benefit plans required to file a Form M-1 are now required to file the Form 5500 regardless of the plan size or type of funding. The exemption from filing for small unfunded, fully insured, or combination unfunded/fully insured plans no longer applies to plans required to file the Form M-1.
According to the Form 5500 Instructions, all welfare benefit plans must provide an attachment to the 5500 filing with “Form M-1 Compliance Information” clearly marked at the top. The attachment must indicate whether the plan was subject to the Form M-1 filing requirement during the plan year; and if so, whether it has completed its Form M-1 filing. In addition, the plan must include its receipt confirmation code relating to the 2013 Form M-1 filing.