MEWA

Frequently Asked Questions

1. What is a MEWA and how is it different than the ACA?


A MEWA is a multiple employer welfare arrangement. A MEWA provides health and welfare benefits to employers of two or more employees who pool their contributions, enabling them to offer health insurance rates and benefits typically available only to larger groups. MEWA’s offer a variety of plan designs that meet the minimum essential coverage requirement of the ACA. They offer many deductible options with copays and prescription drug cards and High Deductible Health Plans compatible with Health Reimbursement Accounts (HRA) and Health Saving Accounts (HSA). In many cases these plans may be less expensive than comparable options available through the ACA Marketplace, and are not subject to some of the federal taxes and state health mandates of the ACA. MEWA’s also allow for changes in benefits and contribution rates at renewal without being “locked in” by the grandfathered status.




2. What is a MEWA’s legal structure?


The Ohio Department of Insurance and several federal government agencies coordinate the oversight and regulation of MEWA’s. This multi-jurisdiction gives the State of Ohio’s Department of Insurance primary responsibility for overseeing the financial soundness of MEWA’s, while the U.S. Department of Labor provides oversight for employee benefit plans and the Internal Revenue Service ensures the nonprofit tax status of the MEWA Sponsor.

In the unlikely event a MEWA does not have sufficient funds to pay beneficiary claims; most reinsurers have contractually agreed to cover any unfunded beneficiary claims. This provision along with other reinsurance programs greatly reduces or eliminates a key risk of this arrangement.




3. Why should an employer change plans now?


Due to the constant policy evolution of the ACA and the uncertainty of future year premiums, many groups will be able to experience a competitive rate that may not be available from Ohio’s ACA Marketplace. Association Benefit Planners will provide an easy-to-understand comparison between the ACA plans and MEWA plans.




4. If I leave my current plan (including an ACA plan) will I be subject to preexisting conditions limitations?


No. The coverage will be offered with no pre-existing condition exclusion.




5. Are there costs associated to join a MEWA?


There is no fee to join a MEWA but the business will need to be an active member of the sponsoring Association or Chamber of Commerce.




6. How will my monthly rate be determined?


In lieu of monthly insurance premiums each group will have a monthly funding rate based on a variety of factors including but not limited to:

  • Number of Covered Employees

  • Medical History

  • Gender

  • Age

  • Tobacco Usage

  • Location

Your rates will also include expected claims, fixed components such as administrative fees and stop-loss premium (a form of protection against excessive claims for your group and the overall MEWA Trust), taxes and assessments and will be billed on a monthly basis.




7. Do I have to switch doctors?


All the MEWA’s that our Agency deals with have large provider networks and facilities that likely would include your doctor and hospital. You should; however, always check to make sure your doctor is in network prior to any service.




8. What happens if I decide to leave the plan in the future?


Members may elect to withdraw from participation in the Plan at the end of a calendar month by giving written notice to the Plan at least thirty (30) days prior to the end of such month.