Labor & Employment Law Daily Wrap Up, BENEFITS NEWS—Labor Department says NAPA-affiliated employers may sponsor single ERISA health plan, (Sep 9, 2026)

By WK Editorial Staff

However, it left unanswered whether the plan in question would be a “fully insured” MEWA for purposes of certain ERISA provisions.

The U.S. Department of Labor’s Office of Regulations and Interpretations has concluded that an association of NAPA auto parts retailers and repair centers may constitute a bona fide employer association capable of sponsoring a single employee welfare benefit plan under the Employee Retirement Income Security Act, according to Advisory Opinion 2026-02A.

The opinion addresses the Blue and Gold Automotive Health Trust Fund Welfare Benefit Plan, which provides health benefits to more than 3,500 employees of over 600 participating employers. The plan is sponsored through the Automotive Benefits Association, a nonprofit organization whose membership is limited to NAPA retail auto parts stores and NAPA auto repair centers.

Single plan? At issue was whether the arrangement constitutes a single ERISA-covered employee welfare benefit plan established or maintained by an employer within the meaning of ERISA Section 3(5), rather than a collection of separate employer-sponsored plans.

In concluding that the arrangement could qualify as a single plan, the Department focused on the requirements for recognition of a bona fide employer group or association. Under longstanding department guidance, participating employers must share a genuine organizational relationship and common business interests that exist independently of the provision of benefits, and participating employers must exercise control over the benefit arrangement.

Commonality. The Department found that the Automotive Benefits Association appears to satisfy the commonality requirement. Membership is restricted to NAPA-affiliated retail stores and repair centers, and the association was established to advance the interests of those businesses. In addition to facilitating health coverage, the association provides a range of services, including human resources support, recruiting and retention resources, training programs, compliance assistance, advocacy on legislative and regulatory issues, and access to various business-related products and services.

Economic interests. The opinion emphasized that the association's activities extend beyond providing employee benefits and are directed toward advancing the business interests of members operating within the same segment of the automotive industry. Based on those characteristics, the Department concluded that participating employers share sufficient common economic interests to support treatment as a bona fide employer association.

Control. The Department also examined whether participating employers exercise control over the association and plan. According to the opinion, members elect the association's board of directors, while participating employers elect trustees responsible for administering the trust and overseeing plan operations. Participating employers also possess authority to nominate and remove trustees and, under certain circumstances, direct trustee actions.

Based on those governance provisions, the Department concluded that participating employers appear to control both the association and the plan, at least in form. Accordingly, the opinion states that the participating employers could constitute a bona fide employer group or association capable of sponsoring a single ERISA-covered employee welfare benefit plan.

The Department nevertheless stopped short of making a definitive determination regarding actual employer control. It noted that whether participating employers exercise control "in substance" is a factual question that generally cannot be resolved through the advisory opinion process. As a result, the opinion leaves open the possibility that a different conclusion could be warranted if the arrangement operates differently in practice than described in the submission.

MEWA. The Department also addressed the plan's status as a multiple employer welfare arrangement, or MEWA. It concluded that the arrangement is a MEWA because it provides welfare benefits to employees of two or more employers, regardless of whether it is treated as a single ERISA plan.

Fully insured? However, the agency declined to determine whether the arrangement qualifies as a fully insured MEWA for purposes of the ERISA preemption provisions set forth in ERISA section 514(b)(6). The association represented that benefits are provided through policies issued by licensed insurance companies and that trust assets are used to pay insurance premiums. The Department stated that it could not confirm fully insured status because it had not been provided with the relevant insurance contracts and therefore could not evaluate whether all benefits are guaranteed under those policies.

The opinion notes that an arrangement generally will satisfy the fully insured standard if benefits are guaranteed under insurance contracts issued by qualified insurers and the insurer remains primarily liable for benefit claims.

Although limited to the facts presented, the opinion provides additional guidance regarding the circumstances under which industry-based employer associations may sponsor single ERISA welfare plans. The Department's analysis relied on prior advisory opinions recognizing that employers sharing common business interests and exercising meaningful control over plan operations may be treated as a bona fide employer association for ERISA purposes.

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