EBSA Proposed Rule
Plans Established or Maintained Pursuant to Collective Bargaining Agreements Under Section 3(40)(A) of ERISA [09/22/1998]
[PDF Version]
Volume 63, Number 183, Page 50542-50544
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF LABOR
Pension and Welfare Benefits Administration
29 CFR Part 2510
RIN 1210-AA48
Plans Established or Maintained Pursuant to Collective Bargaining
Agreements Under Section 3(40)(A) of ERISA
AGENCY: Pension and Welfare Benefits Administration, Department of
Labor.
ACTION: Notice of establishment of the ERISA Section 3(40) Negotiated
Rulemaking Advisory Committee, and notice of first meeting.
-----------------------------------------------------------------------
SUMMARY: The Department of Labor (Department) is establishing the ERISA
Section 3(40) Negotiated Rulemaking Advisory Committee (Committee)
under the Negotiated Rulemaking Act of 1990 and the Federal Advisory
Committee Act (the FACA). The Committee will meet for the first time on
Monday, October 26 through Tuesday, October 27, 1998. The Committee
will develop a proposed rule implementing the Employee Retirement
Income Security Act of 1974, as amended, 29 U.S.C. 1001-1461 (ERISA).
The purpose of the proposed rule is to establish a process and criteria
for a finding by the Secretary of Labor that an agreement is a
collective bargaining agreement for purposes of section 3(40) of ERISA.
The proposed rule will also provide guidance for determining when an
employee benefit plan is established or maintained under or pursuant to
such an agreement. Employee benefit plans that are established or
maintained for the purpose of providing benefits to the employees of
more than one employer are ``multiple employer welfare arrangements''
under section 3(40) of ERISA, and therefore are subject to certain
state regulations, unless they meet one of the exceptions set forth in
section 3(40)(A). At issue in this regulation is the exception for
plans or
[[Page 50543]]
arrangements that are established or maintained under one or more
agreements which the Secretary finds to be collective bargaining
agreements. Arrangements that are sponsored by an entity that adopts
the guise of a labor organization and purports to enter into collective
bargaining for the purpose of offering or providing health coverage
only, with no current or prospective intention of dealing with other
subjects of collective bargaining, are outside the scope of this
rulemaking. It is the view of the Department that it is necessary to
distinguish organizations that provide benefits through collectively
bargained employee representation from organizations that are primarily
in the business of marketing commercial insurance products.
If adopted, the proposed rule would affect employee welfare benefit
plans, their sponsors, participants and beneficiaries, as well as
service providers to plans, plan fiduciaries, unions, employer
organizations, the insurance industry, and state insurance regulators.
DATES: The first meeting of the Committee will be held on Monday,
October 26 through Tuesday, October 27, 1998 from 9:00 a.m. to
approximately 5:00 p.m. on each day. The date, location and time for
subsequent Committee meetings will be announced in the Federal
Register.
ADDRESSES: The first Committee meeting will be held in Room C-5320,
Seminar Room 6, at the U.S. Department of Labor, 200 Constitution
Avenue, NW., Washington, DC 20210. All interested parties are invited
to attend this public meeting. Seating is limited and will be available
on a first-come, first-serve basis. Individuals with disabilities
wishing to attend should contact, at least 4 business days in advance
of the meeting, Patricia Arzuaga, Office of the Solicitor, Plan
Benefits Security Division, U.S. Department of Labor, Room N-4611, 200
Constitution Avenue, NW., Washington, DC 20210 (telephone (202) 219-
4600; fax (202) 219-7346), if special accommodations are needed. These
are not toll-free numbers. The date, location and time for subsequent
Committee meetings will be announced in advance in the Federal
Register.
Minutes of all public meetings and other documents made available
to the Committee will be available for public inspection and copying in
the Public Documents Room, Pension and Welfare Benefits Administration,
U.S. Department of Labor, Room N-5638, 200 Constitution Avenue, NW.,
Washington, DC from 8:30 a.m. to 5:30 p.m. Any written comments should
be directed to the ERISA 3(40) Negotiated Rulemaking Advisory
Committee, and sent to the Public Documents Room, Pension and Welfare
Benefits Administration, U.S. Department of Labor, Room N-5638, 200
Constitution Avenue, NW., Washington, DC, Telephone (202) 219-8771.
This is not a toll-free number.
FOR FURTHER INFORMATION CONTACT:
Patricia Arzuaga, Office of the Solicitor, Plan Benefits Security
Division, U.S. Department of Labor, Room N-4611, 200 Constitution
Avenue, NW., Washington, DC 20210 (telephone (202) 219-4600; fax (202)
219-7346). This is not a toll-free number.
SUPPLEMENTARY INFORMATION:
I. Background
On April 15, 1998, PWBA published a notice of intent to establish a
negotiated rulemaking advisory committee to develop a proposed rule
implementing section 3(40) of ERISA. (63 FR 18345) (Notice of Intent).
Further information on the role of the Committee and the scope of the
proposed rule can be found in the Notice of Intent.
In the Notice of Intent, PWBA requested comments on the
appropriateness of negotiated rulemaking for the proposed rules. The
Department received twelve comments, all supporting the Department's
planned use of negotiated rulemaking for developing this rule. These
twelve comments included 6 applications for membership and 3
nominations for membership on the Committee. Based on this response,
and for the reasons stated in the Notice of Intent, the Department has
determined that establishing this Committee is necessary and in the
public interest.
In accordance with the FACA, PWBA prepared a Charter for the
establishment of the ERISA 3(40) Negotiated Rulemaking Advisory
Committee, and the Secretary approved the Charter.
II. Committee Membership
1. Applications and Nominations
In the Notice of Intent, the Department proposed the AFL-CIO to
represent the interests of labor organizations and participants and
beneficiaries covered by collectively bargained plans. It nominated the
National Coordinating Committee for Multiemployer Plans (NCCMP) to
represent the interests of plans covering the employees of more than
one employer that are subject to collective bargaining, and the
National Association of Insurance Commissioners (NAIC) to represent
states that regulate multiple employer welfare arrangements. The
Department also included the Entertainment Industry Multiemployer
Health Plans because according to its comment on the Department's 1995
Notice of Proposed Rulemaking, entertainment industry multiemployer
plans are structured differently than other multiemployer welfare plans
because of the special nature of the entertainment industry.
In response to the Notice of Intent, ten additional groups applied
for membership on the Committee. The National Railway Labor Conference
(NRLC) nominated a representative for membership on the Committee.
Because collective bargaining for MEWAs for the railway industry is
covered by the Railway Labor Act, and not the National Labor Relations
Act, the Department believes that the interests of the NRLC are
sufficiently different from those of the existing Committee members,
and so accepts the NRLC for membership on the Committee. In addition,
the Department accepts the application of the National Association of
Health Underwriters (NAHU), which represents the interests of
independent agents, brokers and advisors providing health care products
and services to plans and individuals, for Committee membership,
because these interests are not already directly represented by the
organizations proposed by the Department. The Department also accepts
the application of the Health Insurance Association of America (HIAA),
which represents the interests of insurance carriers and managed care
companies that finance and deliver health care, because the perspective
of insurance carriers and managed care companies within the American
private health care system is not already represented by the other
organizations proposed by the Department.
The Department received an application for membership from The
International Corporation (TIC), a third-party administrator of
multiemployer plans; this application for membership was supported by a
nomination of TIC by the Society of Professional Benefits
Administrators. Because the interests of third-party administrators who
may be responsible for implementing the requirements of any regulation
resulting from the negotiated rulemaking process are not already
represented, the Department accepts TIC for membership on the
Committee. Likewise, because the interests of employers participating
in the collective bargaining process for multiemployer welfare plans
are not already represented, the Department accepts the Associated
General
[[Page 50544]]
Contractors of America (AGC) for membership on the Committee to
represent the interests of employers involved in the collective
bargaining process.
The Department does not accept for membership five applicants whose
interests are already adequately represented. The United Association of
Journeymen and Apprentices of the Plumbing and Pipefitting Industry of
the United States and Canada have interests similar to those
represented by the AFL-CIO and the NCCMP. Similarly, because the
distinct interests of maritime supervisory officers are already
represented by the AFL-CIO, which includes maritime unions in its
membership, the Department does not accept the application of the
American Maritime Officers Plans. Likewise, the Department does not
accept the application for membership of the National Conference of
Unions and Employee Benefit Funds (NCUEBF). In its application for
membership, the NCUEBF indicated that it represents self-insured, self-
administered and self-funded employee benefit plans, and has an
interest in any definition of ``associate member'' that may be included
in the regulation. The AFL-CIO's and NCCMP's interests subsume the
interests of the types of plans identified by NCUEBF. The comments
received by these three organizations in response to the Department's
1995 Notice of Proposed Rulemaking identified the same concerns, and
the AFL-CIO and NCCMP represent a broader range of interests than does
NCUEBF.
Finally, the Department does not accept the applications of the
National Rural Electric Cooperative Association (NRECA) and the Legal
Defense Fund of the Peace Officers' Research Association of California
(PORAC). Section 3(40)(A)(ii) of ERISA, 29 U.S.C. Sec. 1002(40)(A)(ii)
provides a separate statutory exception for multiple employer plans
established by rural electric cooperatives. The issues regarding
whether a plan is ``established or maintained under or pursuant to a
collective bargaining agreement'' do not apply to whether a plan is
established by a rural electric cooperative. The PORAC legal defense
fund represents funds that are established only by employee
organizations, and does not represent collectively bargained plans or
any other entities that have an interest in this rulemaking. Because
the provisions of section 3(40) do not apply to PORAC or to the
interests it represents, the Department does not accept its application
for membership.
2. Committee Membership
Accordingly, the members of the Committee are PWBA, the NAIC, the
AFL-CIO, the NCCMP, the Entertainment Industry Multiemployer Health
Plans, the NLRC, TIC, NAHU, the HIAA and the AGC. These Committee
members include representatives from interests that are likely to be
affected by the proposed rule, including employee welfare benefit
plans, their sponsors, participants and beneficiaries, service
providers to plans, plan fiduciaries, unions, employer organizations,
the insurance industry, and state insurance regulators. The following
is the list of individual Committee members, and the interests they
represent:
Labor Unions
Kathy Krieger, American Federation of Labor and Congress of
Industrial Organizations (AFL-CIO)
Multiemployer Plans
Gerald Feder (James Ray--alternate), National Coordinating Committee
for Multiemployer Plans (NCCMP)
Judith Mazo, Entertainment Industry Multiemployer Health Plans
Railway Labor Organization Plans
Benjamin W. Boley, National Railway Labor Conference
Third-Party Administrators
David Livingston, Ph.D., The International Corporation
Employers/Management
James Kernan, The Associated General Contractors of America (AGC)
Independent Agents, Brokers and Advisors Providing Health Care
Products and Services to Plans and Individuals
Nancy Trenti, National Association of Health Underwriters
Insurance Carriers and Managed Care Companies That Finance and
Deliver Health Care
R. Lucia Riddle, Health Insurance Association of America
Federal Government
Elizabeth A. Goodman, Pension and Welfare Benefits Administration
State Governments
National Association of Insurance Commissioners
III. First Meeting of Committee
The first meeting of the Committee will be held on Monday, October
26 through Tuesday, October 27, 1998 from 9:00 a.m. to approximately
5:00 p.m. on each day in Room C-5320, Seminar Room 6, at the U.S.
Department of Labor, 200 Constitution Avenue, NW., Washington, DC
20210. The primary purpose of the first meeting will be to establish
Committee procedures. This meeting is open to the public. Seating is
limited and will be available on a first-come, first-serve basis.
Individuals with disabilities wishing to attend should contact, at
least 4 business days in advance of the meeting, Patricia Arzuaga,
Office of the Solicitor, Plan Benefits Security Division, U.S.
Department of Labor, Room N-4611, 200 Constitution Avenue, NW.,
Washington, DC 20210 (telephone (202) 219-4600; fax (202) 219-7346), if
special accommodations are needed. These are not toll-free numbers.
Minutes of the public meetings and materials prepared for the
Committee will be available for public inspection at the Public
Documents Room, Pension and Welfare Benefits Administration, U.S.
Department of Labor, Room N-5638, 200 Constitution Avenue, NW.,
Washington, DC from 8:30 a.m. to 5:30 p.m. Any written comments should
be directed to the ERISA Section 3(40) Negotiated Rulemaking Advisory
Committee, and sent to the Public Documents Room, Pension and Welfare
Benefits Administration, U.S. Department of Labor, Room N-5638, 200
Constitution Avenue, NW., Washington, DC, Telephone (202) 219-8771.
IV. Authority
This document was prepared under the direction of Meredith Miller,
Deputy Assistant Secretary for Policy, Pension and Welfare Benefits
Administration, U.S. Department of Labor, 200 Constitution Avenue, NW.,
Washington, DC 20210, pursuant to Section 3 of the Negotiated
Rulemaking Act of 1990, 104 Stat. 4969, Title 5 U.S.C. 561 et seq.;
Section 9 of the Federal Advisory Committee Act, 5 U.S.C. App. 2; and
section 3(40) of ERISA (Pub. L. 97-473, 96 Stat. 2611. 2612, 29 U.S.C.
1002(40)) and section 505 (Pub. L. 93-406, 88 Stat. 892, 894, 29 U.S.C.
1135) of ERISA, and under Secretary of Labor's Order No. 1-87, 52 FR
13139, April 21, 1987.
Signed at Washington, DC, this 16th day of September, 1998.
Meredith Miller,
Deputy Assistant Secretary for Policy, Pension and Welfare Benefits
Administration.
[FR Doc. 98-25265 Filed 9-21-98; 8:45 am]
BILLING CODE 4510-29-M
