How do brokers determine which clients might be good candidates for a MEWA and which clients might want to consider other alternatives? Here are a few guidelines:

The first thing, Wright explains, is to examine the laws in the employer's state and determine whether that state accommodates MEWAs.

"Some states don't allow MEWAs at all," Wright says. "Some have significant regulations for MEWAs, and others are very MEWA-friendly, so the first thing we do is look at the state where the association or group of employers is located.

"It's a good thing when a state regulates a MEWA to prevent the inappropriate use of this option – as long as they don't over-regulate," Wright continues. "It gives members the assurance that someone is looking out for them."

If the client or group of clients is in a MEWA-friendly state, then brokers should outline the advantages of a MEWA for clients and determine whether a MEWA would be the best fit for their needs.

"One of the key advantages is that MEWAs are member-owned programs," explains Wright. "So it really benefits the employees who participate. The profits from the program stay in the plan, and employers and their employees gain the benefit of these profits as opposed to the insurance carrier.

"Employers also benefit from the experience," Wright continues. "A big focus nowadays is wellness programs. If employers implement a wellness program, in a self-insured plan, they get the benefit of that: You implement wellness, you see results. So if the employer has a wellness program, then as a MEWA participant, the employer can lower the overall claim costs and the health care fees that they're paying into the program."

Another big advantage of a MEWA is the flexibility that's available to plan participants.

"Because MEWAs are typically formed as trusts, there's usually a board of trustees," she notes, "so employers can reach out to that board and suggest plan changes, or adding ancillary plans, so you have more options."

Overall, many employers will find that a MEWA offers them lower tax rates and a much wider range of choice.

"MEWAs set their benefit plans within state requirements, if there are any," Wright says, "so if you have an association of homebuilders, and they want to offer a plan that accommodates blue-collar workers who don't want to be paying $5,000 for health insurance every month, that association can set their plan design to what fits the needs of the employer in that association. You've got most of the flexibility of being self-funded, so you're not limited on deductibles and copayments, just the maximum out-of-pocket that is regulated by the PPACA for all employers."

And once employers have gotten a taste of what it's like to be a part of a MEWA, in Wright's experience, they tend to stick with it.

"Our plans have about a 93 percent to 95 percent retention rate," she says, "so employers tend to stay when they're in this type of program because they see the benefit. And when you have a stable environment like that, you can see single-digit average increases over many years. With insurance carriers, historical increases have been all over the place – 30 percent one year and 10 percent the next — and insurance carriers also tend to subsidize costs for some of the larger employers at the expense of smaller employers. Another benefit of a MEWA is that there is none of that happening."

Brokers working in MEWA-friendly could find that adding such an option to their arsenal is lucrative for clients across the board.

"A MEWA can offer coverage to individuals, small groups and large groups," Wright notes. "There's really no limitation on who can join as long as they are part of a bona-fide association.

"Employers and associations are all looking for an alternative to their current health plan options," she concludes, "and right now, MEWAs are the only alternative to fully insured coverage for non-union small employers."