It's been a while since we discussed MEWAs (Multiple Employer Welfare Arrangement), but this type of plan (along with AHPs and self-funding arrangements) have become hot (again).
Why's that?
Well, primarily because they offer smaller employers the ability to (potentially) save a lot of money on their group health insurance plans.
And how does that work?
Mostly because, unlike ACA group plans, they're medically underwritten, so relatively healthy groups can benefit from rates that reflect the actual risk, instead of Community Rating, which basically dictates ACA plan rates, which subsidizes unhealthy groups at the expense of healthier ones.
And why are you bringing this up now, Henry?
Well, because I recently underwent training to be able to actually sell these plans. The session I attended was for Anthem's version, and took about an hour. The plans themselves are pretty much "off the shelf," with a variety of options and plan designs, including HSAs. From the employer side, there's a bit more paperwork, including something called a Form 5500, "an important compliance, research, and disclosure tool for the Department of Labor, a disclosure document for plan participants and beneficiaries, and a source of information and data for use by other Federal agencies."
From the employee side, it looks just like any other group health plan: you get an ID card and a website "portal" that lets you track expenses, find providers, all the same bells and whistles as ACA plans, but at (potentially) substantial savings.
Why's that?
Well, primarily because they offer smaller employers the ability to (potentially) save a lot of money on their group health insurance plans.
And how does that work?
Mostly because, unlike ACA group plans, they're medically underwritten, so relatively healthy groups can benefit from rates that reflect the actual risk, instead of Community Rating, which basically dictates ACA plan rates, which subsidizes unhealthy groups at the expense of healthier ones.
And why are you bringing this up now, Henry?
Well, because I recently underwent training to be able to actually sell these plans. The session I attended was for Anthem's version, and took about an hour. The plans themselves are pretty much "off the shelf," with a variety of options and plan designs, including HSAs. From the employer side, there's a bit more paperwork, including something called a Form 5500, "an important compliance, research, and disclosure tool for the Department of Labor, a disclosure document for plan participants and beneficiaries, and a source of information and data for use by other Federal agencies."
From the employee side, it looks just like any other group health plan: you get an ID card and a website "portal" that lets you track expenses, find providers, all the same bells and whistles as ACA plans, but at (potentially) substantial savings.
Of course, there's also the possibility that the rate could could come back higher than an ACA plan (a group can't be declined for health reasons, but it can be rated up), but in that case they're no worse off than before, it just means they're "stuck" with their current plan for a while.
Will be interesting to see how this plays out.
Will be interesting to see how this plays out.
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