What is a MEWA and how can it help your business?

A multiple employer welfare arrangement, or MEWA, takes shape when several employers (you must have at least two, but can have more) pool their resources together in order to provide their employees with group health and other insurance options outside of government health insurance exchanges (MEWAs gained a great deal of popularity following the introduction of the Affordable Care Act). These arrangements could be especially appealing and beneficial for small businesses, who share the collective risk. Participating businesses make payments based on the total number of employees in the pool and the projected costs associated with that number.

Another benefit to an employer partnering with others in a MEWA is ownership and voice within the arrangement. Each employer can propose changes to the plan, meaning they have more influence compared to what they can offer employees if they aren’t participating in a MEWA.

MEWAs and ERISA

As defined by the Employee Retirement Income Security Act (ERISA), a multiple employer welfare arrangement is "an employee welfare benefit plan or any other arrangement which is established or maintained for the purpose of offering or providing" medical, surgical, or hospital care or benefits; benefits in the event of sickness, accident, disability, death, or unemployment; vacation benefits, apprenticeship, or other training programs; or daycare centers, scholarship funds, or prepaid legal services to the employees of two or more employers (including one or more self-employed individuals) or to their beneficiaries.

Let’s take a look at how MEWAs are positioned through the lens of ERISA. ERISA lists three general types of self-funded health plans:

• Single employer
• Multi-employer (through collective bargaining)
• Multiple employer welfare arrangements (MEWAs)

The first two are full ERISA plans. Generally speaking, ERISA does not cover plans established or maintained by government entities — and because MEWAs are positioned between state and federal oversight, they may be uniquely situated to work well for you.

Perhaps best of all, MEWAs are available in the great state of Nebraska, and Union Bank & Trust’s team of experts is here to help. If you and your legal advisors have legal documents drafted, we'll review them to ensure they meet requirements, and once they have the green light, we'll set up the account for facilitating your insurance policies.

Deciding whether to participate in a MEWA can be a complex, multifaceted decision. There are many things to consider, such as state and federal regulations, compliance, stop-loss insurance, and filing and reporting guidelines. If that sounds daunting to you, be sure to work with a trusted legal advisor.

If you're ready to get started, find a Corporate Trust officer near you.