CompletelyDifferent2And now for something completely different.

Since 2004, Washington State has required all self-funded Multiple Employer Welfare Arrangements (MEWAs) to obtain a certificate of authority to conduct business in the state. The statute imposes strict standards of eligibility and detours from federal ERISA interpretations of “bona fide association” with its own unique statutory definition:

“Bona fide association” means an association of employers that has been in existence for a period of not less than ten years prior to sponsoring a self-funded multiple employer welfare arrangement, during which time the association has engaged in substantial activities relating to the common interests of member employers, and that continues to engage in substantial activities in addition to sponsoring an arrangement. However, an association that was formed and began sponsoring an arrangement prior to October 1, 1995, is not subject to the requirement that the association be in existence for ten years prior to sponsoring an arrangement. [RCW 48.125.010]

The Insurance Commissioner may only issue a certificate of authority for operation as a self-funded MEWA to a “bona fide” association that’s been around for at least a decade. No matter that federal law imposes no such standard under ERISA.

The ten year rule isn’t the only strict (weird) standard. Consider this additional requirement of age:

The arrangement has been in existence and operated actively for a continuous period of not less than ten years as of December 31, 2003, except for an arrangement that has been in existence and operated actively since December 31, 2000, and is sponsored by an association that has been in existence more than twenty-five years.

So, according to the statute, the MEWA has to be a decade old and the bona fide association has to be 25 years old before the Insurance Commissioner can authorize the self-funded MEWA. Clearly, Washington encourages and welcomes applications for self-funded MEWAs. Who can meet such restrictive standards?

Apparently, the Washington Technology Industry Association (WTIA) believed that it met Washington’s standards for obtaining a certificate of authority to operate as a self-funded MEWA. The Commissioner had already approved the WTIA as a bona fide association offering fully insured large group coverage last year.

BUT, if you are a regular reader here, you know where this is going.

When WTIA applied for a certificate to become a self-funded bona fide MEWA, the Commissioner advised that they were too late. The agency noted that the statute “prevented” the issuance of any new certificates of authority to self-funded MEWAs. Why?

An arrangement established, operated, providing benefits, or maintained in this state prior to December 31, 2003, has until April 1, 2005, to file a substantially complete application for a certificate of authority. [RCW 48.125.020]

In other words, the Commissioner argues that the statute adopted in 2004 which gave existing MEWAs a year to get a certificate of authority under the new law was actually a “statute of limitations” that barred new certificates after 2005. Naturally, the attorneys for WTIA beg to differ (except for the begging part given their demand).

We represent Washington Technology Industry Association (“WTIA”). We write to request a hearing to challenge the Office of insurance Commissioner’s (“OIC”) disapproval of WTIA’s application to operate a self-funded multiple employer welfare arrangement (“self-funded MEW A”) under RCW Chapter 48.125.

WTIA attorneys found the Commissioner’s explanation, grounds for denial, and peculiar statutory interpretation rather off-putting. Here’s the agency’s explanation:

[T]he agency Interprets RCW Chapter 48.125, read together with the seasoning requirements of RCW 48.125.030(8), to have provided a legal avenue for the self-funded MEWAs that were then operating in Washington to continue to operate. We do not believe that RCW Chapter 48.125 authorizes the Commissioner to issue a certificate of authority to a MEWA such as the Washington Technology Industry Association that has no history of self-funded operation and that failed to submit a substantially completed application by the April 1, 2005 statutory cut-off date. [see November 18, 2015 Letter from OIC to WTIA counsel]

All of this will be sorted out in yet another administrative law hearing on AHPs in the next few months after all the lawyers have shared theories, documents, stories, and phone calls. If you wonder at all about the Monty Python bureaucratic graphic at the beginning of this article, consider the following exchange of correspondence and draw your own conclusion.

[T]he resubmitted application does not provide all of the information required in RCW 48.125.030 through 48.125.070 and does not demonstrate compliance with these other statutory requirements, Like the original submission, the resubmitted application is also deficient and incomplete.

The Washington Technology Industry Association’s resubmitted application for a certificate of authority to operate as a self-funded MEWA in Washington is therefore denied. [From OIC to WTIA]


After learning from the OIC that there is no prescribed application form available, WTIA submitted an application containing each document required under RCW 48.125.050, with the exception of third-party verification reports under subsection (8), which the approved vendor submitted directly to the OIC. [From WTIA to OIC]

“Please take a seat, guess what form you need to complete, then leave because we aren’t accepting applications.”


“Have a nice day.”