In California, a Multiple Employer Welfare Arrangement (MEWA) that provides health benefits to employees of more than one employer must:
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
California law prohibits self-funded Multiple Employer Welfare Arrangements: a MEWA that provides health benefits to the employees of two or more employers must be fully insured through a licensed insurance carrier. The state requires these multi-employer arrangements to use insured products so that member employers and their employees are protected by carrier licensing, solvency regulation, and the insurance guarantee framework rather than by an unregulated self-funded pool. This California-specific ban on self-funded MEWAs makes A the correct statement of the law.
Why the other options are wrong
- B) Although ERISA governs MEWAs at the federal level, California separately requires full insurance, and a self-funded MEWA is not permitted to operate even where ERISA would otherwise preempt state law.
- C) A MEWA is an employer welfare arrangement under ERISA and state law, not a Medicare product; registering as a Medicare Advantage plan is a category error and unrelated to MEWA regulation.
- D) MEWA eligibility is not tied to employer size; the defining feature of a MEWA is that it serves employees of two or more employers, and California's full-insurance requirement applies regardless of the number of covered workers.
Memory hook
California MEWAs must be insured to the bone — no self-funded pools, no unlicensed promises.