Which statement accurately describes a Third-Party Administered MEWA?

• A. Benefits are insured and MEWA is administered by a third party.
• B. Benefits are self-funded and MEWA administered by a third party.
• C. Benefits are insured and MEWA administered by an employer.
• D. Benefits are self-funded and MEWA administered by an insurer.

Answer: (B)

A Third-Party Administered MEWA is one where several employers come together to offer welfare benefits, but the benefits are funded by the employers themselves (self-funded) rather than through a fixed insurance premium. The administration of the plan—claims processing, eligibility, enrollment, and day-to-day management—is handled by an independent third-party administrator, not by the employer or by the insurer. This setup means the MEWA relies on the TPA to run the program while the employers provide the funding for benefits, often with stop-loss coverage available to limit large, unpredictable claims.