Multiple Employer Welfare Arrangement
What Does Multiple Employer Welfare Arrangement Mean?
A multiple employer welfare arrangement (MEWA) is a formal arrangement in which a group of employers combine their contributions into a plan that provides benefits to their employees. These employers can then make contributions into the plan based on the number of people under their employment and the costs related to each employee.
Insuranceopedia Explains Multiple Employer Welfare Arrangement
A multiple employer welfare arrangement is a more cost-effective way to obtain group insurance benefits to employees. By coming together to secure a deal, employers can take advantage of economies of scale and acquire the most competitive benefit packages from insurance companies.
The group that form an MEWA can either be an association of employers, a trust formed by employers, or a trust formed by a labor union.