People who are investigating association health plans will often come across the acronym MEWA. So what does it mean? A MEWA stands for a Multiple Employer Welfare Arrangement. MEWAs are the basis for group health coverage offered through association health plans. As a MEWA, multiple employers can come together within an association to offer a health benefits plan (though, in theory, other benefits could be offered). In other words, the MEWA functions as a single health plan for multiple employers belonging to the association. The ability of employers to work together to sponsor a health plan as a single entity and aggregate total eligible employees allows smaller employers to gain access not only to more flexible large group health plan rules but also gain improved leverage in negotiations with insurance companies and healthcare providers.
MEWAs are primarily regulated under The Employee Retirement Income Security Act of 1974 (ERISA), which is a federal law. However, state laws and regulations can also apply to MEWAs. The recent update to association health plan regulation reaffirmed the role of state departments of insurance in the regulation of MEWAs.
MEWAs have a variety of documentation requirements that include disclosures to plan participants (e.g. a Summary Plan Description) as well as filings with government officials (e.g. Form M-1 and Form 5500).
MEWAs are also occasionally referred to as a “multiple employer trust” or the acronym “MET.”
While association health plans are a type of MEWA, not all MEWAs are association health plans. MEWAs, for example, can also be used for dental or vision benefits as opposed to traditional medical benefits. Additionally, a MEWA does not necessarily require the members of an association to control it while the operations of an association health plan must be controlled by the members of the association in order to be bona fide.