If you are an employer, you are probably concerned about employee health, safety, and the prevention of worker’s compensation claims.
One way to help you manage the risk of health and safety for you and your employees is through a Multiple Employer Welfare Arrangement (MEWA).
Read on to learn about the benefits of having a MEWA and how you can benefit from having a MEWA if you are an employer.
Cost Savings
Multiple Employers’ Welfare Arrangements (MEWAs) are a great way for employers to join forces and achieve more cost-efficient health benefits for their employees and their businesses. When two or more employers are part of a MEWA, they can pool their resources and spread the risk among multiple employers. This has the potential to greatly reduce insurance rates and administrative costs for all involved.
Furthermore, since the employers are sharing the costs, the amount each employer must contribute to the insurance policy per employee is reduced. Employees then are provided with more comprehensive coverage. Not only do MEWAs provide cost savings. They can give employers greater access to employees’:
- medical coverage
- disability coverage
- life insurance coverage
All businesses, large and small, should consider the advantages of joining a MEWA to make health benefits more cost-effective and accessible to their staff.
Increased Buying Power
By pooling together resources, employers can maximize their buying power to get the best possible deals for their business. As such, large MEWAs are in a much better position to take advantage of economies of scale to obtain more competitive rates from insurance carriers and service providers.
This increased buying power and collective leverage of resources can bring numerous benefits. Such benefits also include access to exclusive services that may otherwise be restricted to larger organizations.
Additionally, the joint efforts of larger MEWAs can facilitate:
- research
- education
- promotion
All of which are geared toward the products and services that they are wishing to obtain. Ultimately, MEWAs can be extremely beneficial for employers as they can use their collective strength to get the best products for their business.
Administrative Efficiency
MEWAs can provide a number of administrative efficiencies. One of the primary benefits of MEWAs is that they handle:
- enrollment
- claims processing
- compliance reporting
This reduces the administrative burden for individual employers. This is because all of this information is consolidated into one system. Other administrative efficiencies of MEWAs that make them attractive include:
- streamlined customer service support
- reduced paperwork
- greater access to enrollment
- greater access to claims data
Ultimately, the use of MEWAs removes much of the tedious paperwork associated with benefits administration and provides employers with an efficient way to administer benefits.
Access to Broader Benefits
A MEWA is an increasingly popular option for smaller and medium-sized businesses when it comes to providing employees with health benefits and other forms of coverage. By using a MEWA, these businesses can access a broader range of benefits and coverage options than that which they would be able to offer independently. These options are tailored to fill the unique needs of employers and their employees, such as:
- short-term disability insurance
- long-term disability insurance
- vision and dental coverage
- life insurance
- health insurance
- critical illness insurance
- long-term care
Through using a MEWA, employers can make sure that their employees are well taken care of and don’t miss out on necessary benefits that larger companies may be able to provide.
Risk Sharing
MEWAs distribute the risk of high claim costs across multiple employers. This reduces the impact of unexpected healthcare expenses on any single employer. MEWAs offer a risk-sharing model that can help spread the financial impact of healthcare expenses across employers.
This helps create an economic environment of stability for businesses. It also protects the business from burdening their employees or shareholders with high costs. This is especially in the event of unexpected healthcare expenses.
Employers can also benefit from MEWAs in terms of:
- additional coverage options
- flexible payment options
- improved cash flow
MEWAs provide employers with the necessary resources to balance risk and manage costs associated with healthcare. This enables them to continue providing quality coverage to their employees.
Compliance Assistance
MEWAs also provide compliance assistance, so employers can stay up to date with changing regulations. Compliance assistance includes assistance with filing:
- annual reports
- employee notices
- 5500 forms
Furthermore, MEWAs often analyze and evaluate potential employer plan design options. They also provide:
- guidance on appeals processes
- review documents
- draft plan documents
Lastly, MEWAs can also offer guidance for creating and implementing policies and procedures. This helps ensure both administrators and employers understand their rights and obligations under the laws governing plan benefits.
Stability and Continuity
MEWA provides employers with the opportunity to maintain a consistent benefits package while avoiding the fluctuations associated with employee numbers. Employers then are able to share the administrative and financial burdens of providing employee benefits.
Employers are able to provide stability and continuity for their employees. The inclusion of multiple employers in a pool allows for a blend of risk and reward that increases the stability of the employer’s benefits program.
By pooling the risk amongst multiple employers, it becomes less likely that a single employer will be adversely impacted. This is especially when there is an unexpected rise or fall in the number of employees.
This helps to ensure that employers maintain consistent levels of employee benefits. Thus, providing employees with greater continuity in their coverage.
Customization Options
MEWAs offer the capability to customize the employee benefits they provide to their workers. This enables employers to specify and adjust the coverage to suit the varying needs of their individual employees. MEWAs can help employers to meet the demands of an ever-changing workforce.
This ability to tailor options to fit the needs of different groups helps to ensure that benefits are both cost-effective and tailored to the needs of their particular workers. This is for both part-time workers to those with preexisting conditions.
In addition, employers may be able to more effectively leverage resources. This helps to make sure that their employees are properly covered regardless of their coverage needs. With MEWAs, employers can also offer specialized coverage and streamline costs.
This flexibility and control allows employers to provide benefits in line with their employee’s specific job requirements.
Flexibility in Participation
Employers can participate in a MEWA without locking into a long-term commitment. This provides them with the flexibility to adjust their benefits plans based on their current business needs.
MEWAs also provide regulations that are specifically tailored to all members involved. This allows participants to come together and design a plan based on their unique requirements and needs.
Additionally, MEWAs ensure that participants understand the legal responsibilities associated with their health and welfare plans. This enables them to comply with both federal and state regulations.
Employee Satisfaction
MEWAs provide benefits to employees by offering improved and more customized benefits packages. Employees typically appreciate the investments made by their employer in their welfare. This of which can lead to increased satisfaction and morale.
By providing better healthcare and other services that employees can choose from, MEWAs can create a sense of loyalty to their employer. This of which may contribute to an overall positive attitude towards their employers. MEWAs improve the benefits that employees have access to, resulting in greater satisfaction and morale.
Reduced Administrative Costs
Each employer involved can share the burden as well as the costs of the administrative tasks such as:
- reporting
- monitoring
- contact management
- collection services
This results in less time and money being spent on administration. Furthermore, employers can benefit from the increased coordination and standardization of services across all employers involved in the MEWA. All of these benefits can significantly reduce administrative costs for employers. Thus, making them more competitive in the market.
Compliance with State Regulations
Participating in a MEWA can help employers meet state-specific regulations, as multiple employer welfare arrangements may be exempt from certain state insurance laws under federal ERISA (Employee Retirement Income Security Act) preemption.
Employers can save money by taking advantage of federal tax credits and pay-as-you-go funding structures. Choosing to participate in a MEWA offers the employer a measure of stability in the ever-changing world of insurance.
Employers can also ensure that they are always meeting the applicable state regulations. This partnership of employers and third-party administrator can provide two-fold insight into local regulations. Thus, this can aid the employer in always staying in compliance.
If you are curious more about the benefits or how to get started, you may want to learn more about MEWA here.
Take Advantage of the Benefits of Multiple Employer Welfare Arrangement
Multiple Employer Welfare Arrangement can offer many benefits, such as cost savings, efficiency, and risk diversification. By taking the time to understand the structure and explore the benefits, employers can consider if MEPs are something that will work for their business. Learn more about how MEPs could benefit your business today.
For more articles aside from MEWA compliance, visit our blog.
