Senator Robert Singer, the sponsor of legislation making changes to the law permitting self –funded Multiple Employer Welfare Arrangements (“MEWAs”), announced Wednesday a series of amendments he intends to make to the bill to address concerns that have been raised by interested parties since the bill was first introduced and passed unanimously (79-0) by the General Assembly.

MEWAs are an alternative to traditional commercial insurance that permits employers, especially small- and mid-sized businesses, to band together to obtain economies of scale to help them reduce their health insurance costs and provide a greater range of health benefits to their employees. Senator Singer’s legislation, S2220, is intended to promote the availability of health care by strengthening the ability of MEWAs to compete with traditional health insurance carriers and self insured entities to provide those benefits at a reasonable cost.

“As the bill has progressed through the Legislature I have listened to a wide-range of opinions from supporters and opponents of the bill, from public interest groups, business groups and health care proponents,” said Singer (R-Monmouth, Ocean). “In response to that public input I will be proposing changes to further increase consumer protections, to guarantee and maintain existing health benefit plan offerings and benefit levels for employees in small groups of insureds (those with less than 50 employees), to preserve access to health care for persons of all walks of life and to strengthen the financial integrity of MEWAs.”

The amendments proposed by Senator Singer would do the following:

*Remove language from the bill that would allow a MEWA to obtain capital from third-party investors and permit them to share in underwriting gains;
*Provide that a majority of the board of trustees of a MEWA must represent the employer members, and provide that at least one trustee must be an independent, non-participating trustee chosen by a majority vote of the trustees;
*Restore language to the bill requiring that notice be given to employers and employees covered by a MEWA that the MEWA does not participate in any State Guaranty Funds, and that a MEWA is required to maintain sufficient reserves to pay for all incurred losses, including unpaid claims;
*Provide that small groups must limit the highest rated assessment based on age at no more than two times the lowest rated assessment;
*Reaffirm that small groups must be provided required benefit levels and plan designs; and
*Consistent with federal law, provide that tobacco use may be used as a rating factor in large groups (more than 50 insureds).

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