Small business insurance option Carolina HealthWorks debuts

An employer-provided health insurance option — Carolina HealthWorks — has been authorized for businesses with between two and 50 workers by the N.C. Insurance Department.

The option, known as multiple employer welfare arrangement (MEWA), represents a collaboration involving NC Chamber and Blue Cross Blue Shield NC as third-party administrator.

"Carolina HealthWorks is a bold, collaborative solution to the rising cost of health care for small businesses," said Tunde Sotunde, chief executive of Blue Cross NC.

"This is the kind of creative action needed to make health care more affordable across North Carolina."

The option has been endorsed by Greater Winston-Salem Inc. and is available to its members, as well as members of other chambers of commerce in N.C. Companies must be based in N.C. to qualify.

The chamber plans to provide a virtual panel presentation on the option from 10 to 10:30 a.m. Wednesday. For more information or to register, go to https://members.winstonsalem.com/ap/Events/Register/NaF656DcYCaCm.

According to Investopedia, a MEWA "enables groups of employers to pool resources and provide health and welfare benefits to their employees more cost-effectively."

Operating under the federal Employee Retirement Income Security Act, MEWAs enable smaller companies to share risk and access insurance options outside government-run exchanges. Also eligible are combinations of self-employed individuals.

Coverage can include: medical, surgical or hospital care or benefits; benefits in the event of sickness, accident, disability, death or unemployment; vacation benefits, apprenticeship or other training programs; daycare centers, scholarship funds or prepaid legal services.

Employers contribute based on workforce size and estimated costs.

Carolina HealthWorks is sold through Blue Cross NC appointed agents. Direct enrollment is available through the insurer for those not currently working with an agent.

"The creation of Carolina HealthWorks is a meaningful step in giving small businesses a tangible, more affordable path forward," said Gary Salamido, president and chief executive of NC Chamber.

"However, MEWAs also face challenges," Investopedia said, "including financial risks and varying state regulations that affect oversight and compliance."

As a result, most MEWA administrators and participants buy stop-loss insurance to limit their liability. Such insurance covers errors and omissions, fidelity bonds, directors and officers, crime and cyber liability.

Benefits are provided by the NC Chamber Benefit Trust, with excess coverage coming from a licensed insurer. The Trust isn't backed by a guaranty association, but is regulated by the state Insurance Department.