MEWA Association of America responds to the Department of Labor’s Proposed Rulemaking of Association Health Plans (AHPs)

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The U.S. Department of Labor recently announced a Notice of Proposed Rulemaking (NPRM) to expand the opportunity of offering employment-based health insurance to small businesses through Small Business Health Plans. MEWA Association of America, a newly formed trade association promoting the interests of self-insured MEWAs, has provided its response to the NPRM.

MEWA Association of America

The U.S. Department of Labor recently announced a Notice of Proposed Rulemaking (NPRM) to expand the opportunity of offering employment-based health insurance to small businesses through Small Business Health Plans, also known as Association Health Plans. The NPRM was published in the Federal Register on Jan. 5, 2018, and was available for public comment for 60 days, or until March 5. 

MEWA Association of America (MAA) is a newly formed trade association promoting the interests of self-insured MEWAs (AHPs). Many MEWAs have successfully operated for decades, and some for over 30 years. The legal mechanism to create a self-insured AHP is a Multiple Employer Welfare Arrangement (MEWA). MEWAs can be fully insured as well; however, when referred to hereafter, we are restricting our comments to self-insured MEWAs.

MEWAs were created under the amendments to the Employee Retirement Income Security Act (ERISA) in 1983. ERISA now allows employers to form self-insured health plans through their business associations, which are re-insured by insurance companies, thereby providing adequate protections against insolvency.

MAA’s response was authored by William Megna, trustee and General Counsel of MAA, and David Wilson of Windsor Strategy Partners, an actuarial firm.

MAA’s response is as follows: 

We advocate allowing AHPs to cross state lines regardless of whether they have a common interest (same trade or industry) or have no common interest, such as a Chamber of Commerce. We believe those entities who are qualified should be able to cross state lines, thereby offering health insurance to small businesses for potentially 20 to 50% savings. AHPs can amalgamate large amounts of lives, which increases the spread of risk and drives down the cost of coverage. 

Single proprietors are hurt worst by high-cost health insurance and should be allowed to join AHPs. There are vagaries in the regulations as to whether one-person businesses or working owners are allowed to join AHPs. We asked the department to clarify this.

Class exemption – At its discretion, the DOL may grant a class exemption to self-insured MEWAs, which we, at MAA, have requested. This allows AHPs to cross state lines and implement most of what we recommend in our response. We also offer a framework on how to regulate AHPs. Mr. Megna coined the phrase FQMs, or Federally Qualified MEWAs. 

MAA has the same goal as the Administration to offer multiple health insurance options via qualified Association Health Plans across state lines, thereby helping small businesses lower their health insurance costs. Click here for MAA’s complete response.

For more information contact William Megna at 844-777-6392 or email WMegna@GenovaBurns.com. To join MAA, contact Bill Dyer (Mr. MEWA) at williamd@mewaassociation.com.

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William Dyer
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