MEWA Association Supports Trump’s Executive Order Allowing Association Health Plans (AHPs) to Offer Coverage Across State Lines

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President Trump’s executive order can free up Multiple Employer Welfare Arrangements (Association Health Plans) to be solely regulated by the DOL, thereby allowing them to offer coverage in all states. In states where there are only one or two insurance companies, there could be dozens of AHPs creating competition, thereby prompting lower medical insurance rates.

AHPs have been very successful in reducing health insurance costs for small businesses and their employees.

“We applaud President Trump and his recent executive order to allow Association Health Plans (also known as Multiple Employer Welfare Arrangements, or MEWAs) to offer coverage across state lines,” says William Dyer, board member of the MEWA Association of America (MAA).

“It is surprising to hear reports in the media about how AHPs won't work,” Dyer states. “On the contrary, AHPs/MEWAs have existed for over 30 years and have been very successful in reducing health insurance costs for small businesses and their employees. We look forward to the immediate implementation of the President’s order, allowing Association Health Plans to offer coverage across state lines.” Dyer has been an advocate for multi-state MEWAs/AHPs for so long that he is known as Mr. MEWA.

Background:

Current law via ERISA allows for Association Health Plans (AHPs), which are called Multiple Employer Welfare Arrangements (MEWAs). ERISA was modified in 1983 to allow for the creation of MEWAs/AHPs.

MEWAs/AHPs allow thousands (in some cases) of small businesses to form one large group. The group self-insures the health insurance risk, backed by reserves and stop loss/reinsurance, and can save the small business and its employees 20 to 50% (compared to purchasing insurance in the small group market).

However, most MEWAs/AHPs have been limited to offering coverage in one state, as they have dual regulation by the Department of Labor (DOL) and each state’s Department of Insurance (DOI). Each state’s DOI has its own requirements, which makes having multiple-state MEWAs/AHPs a huge burden.

President Trump’s executive order can free up MEWAs/AHPs to be solely regulated by the DOL, thereby allowing them to offer coverage in all states. In states where there are only one or two insurance companies, there could be dozens of AHPs creating competition, thereby prompting lower medical insurance rates.

The section of ERISA that provides for AHPs/MEWAs to be solely regulated by the DOL, and thereby allowing for multiple state AHPs, is 29 U.S.C 1144 (b)(6)(B). Legislation will not be required; the DOL and Secretary Acosta already have the authority to make this regulatory adjustment.                

About MEWA Association of America (MAA):        

MAA consists of self-insured MEWAs that have gathered to protect the existing infrastructures in which they operate and to lower health care costs for small businesses and their employees. MAA promotes market regulatory changes, which will open new markets to existing and future MEWAs, through the introduction of consistent standards for regulation and solvency across the USA. See MAA's website here.

About William Dyer:

William Dyer is the Vice President and Trustee of MEWA Association of America. He is also the Vice President and Co-Founder of HCP National, the healthcare industry’s insurance broker since 1994. Based on premium volume, HCP National is the largest MEWA stop loss broker in the country. Mr. Dyer is known for solving seemingly impossible insurance problems. He specializes in stop loss insurance, reinsurance, professional liability insurance, and business insurance. From self-insured medical employer plans or Multiple Employer Welfare Arrangements, to ACOs and HMOs who need stop loss reinsurance, Mr. Dyer finds clients the greatest coverage, for the lowest price. Mr. Dyer is one of few brokers in the country who has placed over 500 million dollars in stop loss insurance in their careers.

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William Dyer
@mewaassociation
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