South Carolina Life and Health Practice Exam

What is the term for small employers who are sponsored by an insurer to provide group benefits to their employees?

1. MEWA

2. SPP

3. COBRA

4. PPACA

The correct answer is: MEWA

The term used for small employers who are sponsored by an insurer to provide group benefits to their employees is known as a Multiple Employer Welfare Arrangement (MEWA). A MEWA allows small businesses to band together to offer health benefits to their employees as a single plan. This collective approach can help reduce costs and administrative burdens for the participating employers while ensuring that their employees have access to health insurance that may not be feasible for smaller employers to obtain on their own. By pooling resources and risks, MEWAs can provide a wider range of benefits and improve bargaining power with insurance providers. This is particularly beneficial for small employers who might otherwise face difficulties in providing competitive health benefits due to costs or lack of options in the insurance market. The other options refer to different concepts in health and insurance: SPP, or Small Group Health Plan, is typically used for employer health insurance groups but does not specifically imply sponsorship; COBRA involves the continuation of health benefits after employment ends; and PPACA, or the Patient Protection and Affordable Care Act, addresses health care reform more broadly, rather than specifically for small employer-sponsored plans.