                                 CODE OF VIRGINIA

CONDITIONS FOR A BENEFITS CONSORTIUM (§ 6.2-952)

A trust shall constitute a benefits consortium when all of the following
conditions exist:

1. The trust is subject to (i) ERISA and U.S. Department of Labor regulations
applicable to multiple employer welfare arrangements and (ii) the authority of
the U.S. Department of Labor to enforce such law and regulations;

2. A Form M-1, Report for Multiple Employer Welfare Arrangements (MEWAs), for
the applicable plan year shall be filed with the U.S. Department of Labor
identifying the arrangement among the trust, sponsoring association, and benefit
plans offered through the trust as a multiple employer welfare arrangement;

3. The trust operates as a nonprofit voluntary employee beneficiary association
within the meaning of &#xA7; 501(c)(9) of the Internal Revenue Code of 1986;

4. The trust&#8217;s organizational documents:
			a. Provide that the trust is sponsored by the sponsoring association;
			b. State that its purpose is to provide medical, prescription drug, dental,
and vision benefits to employees of the sponsoring association and its members
and the dependents of those employees through benefits plans;
			c. Provide that the funds of the trust are to be used for the benefit of the
participating employees, and their dependents, through insurance,
self-insurance, or a combination thereof as determined by the trustee and for
defraying reasonable expenses of administering and operating the trust and the
benefits plans offered through the trust;
			d. Limit participation in the benefits plans offered through the trust to
employers that are the sponsoring association, members of the sponsoring
association, and their affiliates;
			e. Limit the benefits plans offered through the trust to benefits plans
sponsored by the sponsoring association;
			f. Grant the sponsoring association the power to appoint the trustee of the
trust;
			g. Provide the trustee with powers for the control and management of the
trust; and
			h. Require the trustee to discharge its duties with respect to the trust in
accordance with the fiduciary duties defined in ERISA;

5. Five or more employers participate in the benefits plans offered through the
trust;

6. The trust establishes and maintains reserves determined in accordance with
sound actuarial principles;

7. The trust has purchased and maintains policies of specific, aggregate, and
terminal excess insurance with retention levels determined in accordance with
sound actuarial principles from insurers licensed to transact the business of
insurance in the Commonwealth;

8. The trust has secured one or more guarantees or standby letters of credit
guaranteeing the payment of claims under the benefits plans offered through the
trust in an aggregate amount not less than (i) the trust&#8217;s annual
aggregate excess insurance retention level, minus (ii) the annual premium
assessments for the benefits plans offered through the trust, minus (iii) the
trust&#8217;s net assets, which net assets amount shall be net of the
trust&#8217;s reasonable estimate of incurred but not reported claims; and such
guarantees or letters of credit have been issued by (a) banks participating in
the benefits plans offered through the trust or (b) qualified United States
financial institutions as such term is used in subdivision 2 c of &#xA7;
38.2-1316.4;

9. The trust has purchased and maintains commercially reasonable fiduciary
liability insurance;

10. The trust has purchased and maintains a bond that satisfies the requirements
of ERISA;

11. The trust is audited annually by an independent certified public accountant;

12. The trust does not include in its name the words &#8220;insurance,&#8221;
&#8220;insurer,&#8221; &#8220;underwriter,&#8221; &#8220;mutual,&#8221; or any
other word or term or combination of words or terms that is uniquely descriptive
of an insurance company or insurance business unless the context of the
remaining words or terms clearly indicates that the entity is not an insurance
company and is not carrying on the business of insurance; and

13. The trust does not pay commissions or other remuneration to any person that
is conditioned upon the enrollment of persons in any benefits plan offered by
the trust.

HISTORY: 2014, cc. 220, 296.