Press Release: Multiple Employer Welfare Arrangement (MEWA)

RICHMOND – Senators Siobhan Dunnavant (R-12) and Frank Wagner (R-7) have introduced legislation that would allow nonstock corporations like the Virginia Chamber of Commerce and the National Federation of Independent Businesses (NFIB) Virginia to establish a benefits consortium to provide health insurance to its members.

SB934 will allow these organizations to pool their members together to offer health insurance plans, ultimately reducing health care costs to members and their employees and increasing competition in the marketplace. The lower cost will allow more employers to offer coverage for employees at a much lower rate than the cost than plans in the individual marketplace. The benefits consortium will be a multiple employer welfare arrangement (MEWA).

“This is an innovative way to improve health care coverage for employees of businesses large and small across the Commonwealth,” said Dunnavant. “By allowing organizations like the Virginia Chamber and NFIB to offer health benefits to their member companies, we are encouraging employers to offer coverage for their employees and creating a model for a sustainable alternative to what is a very volatile health care market today.”

“The number one issue confronting policy makers today is containing the skyrocketing cost of healthcare. By allowing small businesses and their employees to pool together to purchase health insurance it will drive the cost of health insurance down,” said Wagner. “Quite simply, the bigger the group, the lower the cost. This is one of a series of bills designed to bend the cost curve.”

“Employers identified rising health care costs as their top area of concern in our Blueprint Virginia 2025 survey,” said Barry DuVal, President & CEO of the Virginia Chamber of Commerce. “This is an innovative approach to offering health care coverage to thousands of Virginians. We appreciate the Senators’ willingness to lead on this very important issue and their efforts to improve health care by using a free market approach to reduce cost and improve quality.”

“Small businesses in Virginia have few choices when it comes to healthcare insurance and are often forced to turn to the individual marketplace to provide coverage to their employees and themselves, which can be expensive and unreliable,” said Nicole Riley, NFIB/Virginia state director. “Small businesses make up 99.5 percent of businesses in the Commonwealth and until now have had nowhere to turn to offer competitively priced, quality health insurance to employees. This is a huge opportunity to offer more affordable choices to a majority of employers in the Commonwealth.”

SB934 authorizes an association organized as a nonstock corporation whose members are employers conducting business in the Commonwealth to sponsor a trust. The measure authorizes the trust, called a benefits consortium, to sell benefits plans to its members. To be eligible to sponsor a plan, the association is required to have been actively in existence for 10 years, have at least five members, have been formed for purposes other than obtaining or providing health benefits, and operate as a nonprofit entity. The benefits plan may also provide medical prescription drug, dental, and vision coverage for the employees of members and the sponsoring association and their dependents. The benefits may be self-funded or purchased from an insurer. The benefits consortium will be a multiple employer welfare arrangement subject to the provisions of the federal Employee Retirement Income Security Act of 1974. The measure exempts the benefits consortium from state taxation and insurance regulations.

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