Which statement about MEWAs is true?

The correct answer identifies a fundamental aspect of Multiple Employer Welfare Arrangements (MEWAs). A MEWA is specifically designed to provide health and welfare benefits to the employees of two or more employers. This structure allows smaller employers to pool their resources and offer health insurance plans that they might not have been able to afford individually.

Understanding the nature of MEWAs is essential, and the statement that a MEWA cannot be a single employer plan accurately reflects this definition. A MEWA must involve multiple employers, and the intent behind this arrangement is to allow those employers to collaborate and share the risks and costs associated with providing health benefits to their employees.

Considering this, the other options are not aligned with the definition and functioning of MEWAs. A MEWA, by definition, requires involvement from multiple employers (two or more), therefore it cannot function as a single employer plan, nor does it restrict the number of participating employers to any specific number like three or four. The importance of this distinction lies in understanding how MEWAs operate and their benefits to participating employers and employees.