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How MEWAs Can Help Small Businesses Save on Medical Plans

Posted January 13, 2023 by Matt Baker, Director of Commercial Sales

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Multiple Employee Welfare Arrangements or MEWAs provide small business owners with 50 employees or less an affordable way to offer group health insurance to their employees via a self-funded benefits plan. By grouping similar sized small businesses together and pooling their contributions (giving them better purchasing power), MEWAs help small companies compete for quality job candidates looking for robust medical benefits as part of their total compensation package.

A survey by Glassdoor showed 60% of respondents consider benefits and perks a major factor in whether they would accept a job offer, and 80% said they would choose additional benefits over a pay raise. According to the Bureau of Labor Statistics, behind payroll, health insurance is a company’s biggest cost. Since group plans are more affordable and more benefit-rich, they are one of the biggest assets a company can offer its workforce.

One of the benefits a MEWA offers employers is the flexibility to choose plans to fit what’s important to their employees – whether that’s a wide variety of providers and facilities to supplemental dental and vision coverage.

How Much Will It Cost?

Many factors go into determining how much both your company and your employees will pay toward their healthcare costs. Typically, the more companies that participate in the MEWA means lower costs for all involved. Each employee will be asked to complete a medical history questionnaire that helps the MEWA underwriters more accurately determine the estimated costs for a company (this step can equate to significant cost savings on medical premiums). Oftentimes self-funded plans feature variable monthly premiums, which can make budgeting tricky for a small business. One of the benefits of a MEWA is premiums will remain the same for the entire plan year.

Advantages of a MEWA

MEWAs offer employers the ability to customize your company’s healthcare offerings and allow employees to pick what’s crucial to them. Some of those options could include:

  • Exclusive and wide network of providers and facilities to choose from. Generally, exclusive networks cost less and may be a preferable option for employees who are young and/or healthy.
  • Prescription drug benefits with varying co-pays.
  • High and low deductible plans with options for a tax savings HSA (health savings account).
  • Add-on benefits such as vision, dental and life insurance.
  • Health and wellness tools (like health coaching, condition management, behavioral health services and smoking cessation).

Another advantage is that MEWAs provide cost savings over most plans offered under the Affordable Care Act (ACA) because they aren’t subject to ACA-mandated taxes and fees.

Are You Eligible to Join a MEWA?

If you are a self-employed sole proprietor or you employ up to 50 people, you meet the first eligibility requirement.

SummaCare has partnered with the Greater Akron Chamber of Commerce and their affiliated chambers to offer a MEWA health plan to members. The Chamber Health Benefits Plan allows employers to choose from a variety of benefit plans, including PPO and HSA-compatible options, as well as several SummaCare networks, including The Preferred Choice Network, a high quality, cost-competitive new commercial network comprised of Summa Health, Cleveland Clinic and Akron Children’s Hospital.

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