Multiple-Employer Welfare Arrangements, or MEWAs, are growing in popularity as another alternative to traditional health insurance policies. The Affordable Care Act’s mandate requires a broader range of employers to cover their employees’ healthcare costs. MEWAs are an alternative healthcare option to the federal health insurance exchanges.
MEWAs are a kind of self-funded insurance plan. MEWAs are put together by a group of employers who don’t want to work within the governmental healthcare system. A self-funded MEWA allows a group to get together to pool their health care resources, rather than strike out on their own to fund their health insurance needs individually.
Benefits of MEWAs
MEWAs are beneficial to employers because they allow for risk to be spread to a number of entities, rather than be shouldered by one small business. MEWAs can be used to offer health care incentives to employees or members of a professional association. If a small business doesn’t want to use the existing federal health insurance marketplace in order to provide health insurance for their employees, this can be a viable alternative.
MEWAs are member-owned, meaning the benefits flow around to all the people who are involved in the program. Employers who offer a MEWA health insurance plan are able to keep deductibles and premiums stable while still offering full healthcare coverage to their employees. Profits from the MEWA stay within the group that started the MEWA, so the savings and the risks are spread around.
Many MEWAs are set up like a board of trustees. This means that there is no artificial inflating of health insurance costs and that your payments don’t have to change year to year. If an employer is offering up incentives for their employees in the form of a wellness program, that positive action comes back around in the form of healthier employees and even lower insurance costs. If employees sign on to the MEWA program but don’t use it very often, costs are decreased for everyone.
A board of trustees is usually set up to manage the MEWA, which allows changes and alterations to be made to the program to account for the specific needs of the group that is being insured. This ensures a stability that doesn’t always exist in traditional insurance plans, because people are in control of the costs and not the insurance market.
Although small businesses can benefit from MEWAs, other organizations large and small can create a MEWA, too. Individuals, large groups, and professional associations are also eligible for this kind of insurance program.
What to know about MEWAs
There are some states in the US that allow MEWAs, while others do not. Other states may regulate MEWAs strictly. Although too many restrictions can harm the functioning of a MEWA, a level of regulation isn’t a bad thing. This keeps MEWAs for the people, businesses, and organizations that can benefit from them the most and use them properly.
When determining your eligibility for a MEWA, your state’s laws regarding this kind of insurance plan will need to be checked. If your state does allow MEWAs, this can be an incredibly helpful opportunity for you and your employees.
MEWAs are member-owned, so the rewards and the risk are contained in that particular group of employers or associated organizations. This allows for a dissemination of pressure if there are a lot of claims one year and not the next. A MEWA is set up to be regulated, but also to give employers the ability to control their own health insurance options and not be vulnerable to the changes in the government-run health insurance exchange.
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