CBIA Provides Update - AHP Coalition
Section 1
- Incorporates Section 38a-1 (common insurance definitions already in statute) to apply to
MEWA-enabling legislation
Section 2 - Definitions: Self-Funded MEWA
- Sponsoring association (i.e. associations eligible for licensure): any industry trade group
domiciled in the state with (1) constitution and bylaws; (2) not less than 500 employees
and not less than 25 employer members; and (3) in existence for at least 5 years
- Employer members (employers eligible for an association MEWA): entity domiciled in
state, member of association, and employs at least 2 employees
Section 3 - Requirements & Consumer Protections: Self-Funded MEWA
What is a level-funded plan?
• A level-funded plan is a type of self-insured1 medical coverage that uses stop-loss coverage.
• Self-insurers cover all medical claims which is difficult for small businesses to do. Typically, only large companies self-insure.
• Insurance companies are marketing level-funded plans to small businesses. The plan relies on stop-loss coverage which is a type of catastrophe insurance.
• In level-funded plans, the employer pays medical claims for an employee until a certain threshold which is known as an attachment point (similar to a deductible). Once the attachment point is reached, the stop-loss coverage kicks in.
