STATEHOUSE — Around 130 school districts provide insurance for their workers and teachers through a multiple employer welfare arrangement, also known as a “MEWA”.
These arrangements are made up of similar employers that contribute money to a fund based on the number of employees they have. Money from the fund is then used to provide health insurance for those employees.
MEWAs really became popular after the passage of the Affordable Care Act as a cheaper option to provide insurance for employees.
However, some lawmakers in the Indiana Statehouse are concerned about a lack of transparency on just how MEWAs operate. State Rep. Bob Boehning (R-Indianapolis) has filed legislation to establish are few regulations on how MEWAs can operate in Indiana.
“A significant amount of public resources are invested in these public healthcare plans,” Boehning told Indy Politics. “The true intent of them is to drive healthcare costs down. Currently, state law does say that if you are a school district we make the state health plan as an option.”
Many school districts have opted to use MEWAs instead. But, one issue Boehning takes with these decisions is that once a school district, or business for that matter, buys into a MEWA it can be very hard to get out of it.
It operates somewhat like a bank insofar as that once you make a deposit to join a MEWA if you choose to leave you do not get that deposit back. When it comes to public schools, state funds are used to cover those deposits. Those state funds come from your taxpayer money.
So how much do schools spend on MEWAs?
“I don’t have a number in front of me, but I’m sure it’s in the billions,” Boehning said. “Because we spend about seven and a half to eight billion dollars annually on K-12 just in state appropriations.”
Boehning said more transparency is needed in how MEWAs work so that the state is not spending any more money than it needs to on insurance costs.
