INDIANA – Senator Mike Braun has introduced a bill to make it easier for small employers to offer comprehensive and affordable health coverage through Multiple Employer Welfare Arrangements (MEWAs).
Multiple Employer Welfare Arrangements (MEWAs), also known as Association Health Plans (AHPs), is a type of employer-sponsored group health plan that allows small employers to access the same type of comprehensive and affordable health coverage large employers offer to their employees.
Large employers have an inherent advantage in negotiating their health plan designs, provider networks, and premium rates. This is because the greater the number of employees in the risk pool, the more flexible the plan offerings and the lower the premium rates may be.
Small employers lack the resources and bargaining power of large employers. By obtaining health coverage through a MEWA, small employers can “group purchase” and offer the same type of comprehensive and affordable health coverage sponsored by a large employer.
“Multiple Employer Welfare Agreements are an important tool for small businesses to be able to offer comprehensive and affordable health coverage. Inconsistent federal guidance has made it difficult for employer groups to form and stay in compliance with MEWA regulations, and this bill will make it easier for small businesses to take advantage of MEWAs.” – Senator Mike Braun
The Multiple Employer Welfare Arrangement (MEWA):
Ensures that a group or association that meets the conditions set forth in the Act are considered an “employer” under ERISA and can establish a single Plan MEWA with at least 51 employees, which will be regulated like a large employer health plan.
- Allows industry- and non-industry-based groups to establish a MEWA with no geographic limitation.
- Includes a grandfather rule to ensure that groups or associations already considered an “employer” under ERISA can continue to operate.
- Allows self-employed individuals with no employees to participate in a MEWA just like employees.
- Adds consumer protections to make sure the health coverage is comprehensive.
- Protects people with pre-existing conditions.
- Does not preempt state law.
This legislation is endorsed by the National Federation of Independent Businesses.
