NJ Spotlight published the following article on 6/24/2014. To read the full article, click here.

Bill Aims To Open Up More Health Insurance Options For Small Businesses

Andrew Kitchenman | June 24, 2014

Small employers have typically been at a disadvantage compared with larger companies when it comes to getting health insurance for their workers, but a measure advancing in the Legislature is intended to level the playing field.

The bill, A-3421/S-2220, would update the state’s rules for businesses joining together to provide insurance, an arrangement known as a Multiple Employer Welfare Arrangement (MEWA).

Under MEWAs, a group of employers will self-insure rather than paying a commercial insurer for a health plan. By joining together, companies can spread their risk across a larger pool of insured workers.

MEWAs have a checkered history in the state. They grew in popularity in the early 2000s, but problems emerged with some of them, including the 2002 insolvency of the New Jersey Coalition of Automotive Retailers MEWA — with $15 million of unpaid employee medical bills. Concerns about MEWAs’ financial security prompted the state to pass a law regulating them in 2002, which ratcheted down the formation of new arrangements.

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