Page 150 - An Indispensible Resource for Being a Credible Activist

unused balances and earnings to accumulate. Unlike FSAs, most MSAs are combined
with a high deductible or catastrophic health insurance plan.

Minimum premium plan (MPP)—A plan where the employer and the insurer agree that
the employer will be responsible for paying all claims up to an agreed-upon aggregate
level, with the insurer responsible for the excess. The insurer usually is also responsi-
ble for processing claims and administrative services.
Multi-employer health plan—Generally, an employee health benefit plan maintained pur-
suant to a collective bargaining agreement that includes employees of two or more
employers. These plans are also known as Taft-Hartley plans or jointly-administered
plans. They are subject to federal but not state law (although states may regulate any
insurance policies that they buy). They often self-insure.

Multiple Employer Welfare Arrangement (MEWA)—MEWA is a technical term under fed-
eral law that encompasses essentially any arrangement not maintained pursuant to a col-
lective bargaining agreement (other than a state-licensed insurance company or HMO)
that provides health insurance benefits to the employees of two or more private employ-
ers. Some MEWAs are sponsored by associations that are local, specific to a trade or
industry, and exist for business purposes other than providing health insurance. Such
MEWAs most often are regulated as employee health benefit plans under the Employee
Retirement Income Security Act of 1974 (ERISA), although states generally also retain
the right to regulate them, much the way states regulate insurance companies. They can
be funded through tax-exempt trusts known as Voluntary Employees Beneficiary
Associations (VEBAs) and they can and often do use these trusts to self-insure rather
than to purchase insurance policies. Other MEWAs are sponsored by Chambers of
Commerce or similar companies of relatively unrelated employers. These MEWAs are not
considered to be health plans under ERISA. Instead, each participating employer’s plan
is regulated separately under ERISA. States are free to regulate the MEWAs themselves.
These MEWAs tend to serve as vehicles for participating employers to buy insurance poli-
cies from state-licensed insurance companies or HMOs. They don’t tend to self-insure.
Premium—Agreed upon fees paid for coverage of medical benefits for a defined benefit
period. Premiums can be paid by employers, unions, employees, or shared by both the
insured individual and the plan sponsor.
Premium equivalent—For self-insured plans, the cost per covered employee, or the amount
the firm would expect to reflect the cost of claims paid, administrative costs, and stop-
loss premiums.

Primary care physician (PCP)—A physician who serves as a group member’s primary con-
tact within the health plan. In a managed care plan, the primary care physician pro-
vides basic medical services, coordinates and, if required by the plan, authorizes
referrals to specialists and hospitals.
Reinsurance—The acceptance by one or more insurers, called reinsurers or assuming com-
panies, of a portion of the risk underwritten by another insurer that has contracted with
an employer for the entire coverage.

CHAPTER 10 • Checklist of Health Insurance Terms 133