ERISA stands for the Federal Employee Retirement and Income Security Act, was enacted in 1974, largely to regulate employee pension funds. Although the law was originally enacted to protect employee pension funds, it also affects employer-sponsored health plans and employee welfare benefits.
Employers may choose to purchase a traditional health insurance product in the open market, or they may choose to self-fund in the context of a Multiple Employer Welfare Arrangement (MEWA), meaning that an alliance of many employers creates a group market that pools their contributions in the self-funded benefits plan for their employees’ welfare. By pooling their contributions together, employers of all sizes are better positioned to offer the best benefit packages from insurance companies. Nationally, about half of all insured employees are covered by these self-funded health and welfare benefit plans.
However, when a bona fide Collective Bargaining Agreement is present, as in our case through our Oasis Labor Association (see About Us), the MEWA becomes a certain Entity Claiming Exception, or ECE, meaning that our Workers’ Comp benefit (which must be presented with a menu of other benefits and needs to be more encompassing than regular WC insurance-based products in the market) PREEMPTS a local opt-in State’s jurisdiction over the coverage we extend to our members. And that is how, as a non-MEWA, our labor organization is able to offer this ERISA-based benefit to our growing membership base.