Association Benefit Plans

[Small Town ND]

I would like to approach a State-wide association here in North Dakota. They currently have a low rate, but with a HUGE group like that, who knows where the numbers will align.

I am currently working with one of the business owners who is also on the Board of Directors of this Association. They also pay their bill to a Health Care Trust that the group set up.

I know I am just throwing out some facts... But I am looking for advice on what is the best way to approach this group for Group Health & Dental.

 

[somarco]

If they don't have a plan now, good luck. Finding a fully insured carrier to take on an association with unknown risk, final demographics and participation is almost impossible.

When these plans are set up (group, not individual coverage) there is minimal underwriting and step rates.

Doesn't take a rocket scientist to figure out you look at the rate for your age. If it is less than you are paying now you sign up. If not, you don't.

Associations take in all the bad risks and never get the good ones. This will eventually sink the plan if it ever get's off the ground.

In the "old" days when you could self fund an association it was fairly easy to do so and find a stop loss carrier. Too many of those plans were run by crooks that siphoned off too much money then disappeared when the plan blew up.

 

[Franz Kafka]

Association endorsed individual major med is a different colored horse.

I've come across this several times. Do they usually offer member discounts for individual coverage?

 

[somarco]

Do they usually offer member discounts for individual coverage?

No.

Usually same rates & benefits as on the street. Sometimes if the association is large enough (think AARP) they can ask for a private label plan that is similar to street plans.

 

[Franz Kafka]

No.

Usually same rates & benefits as on the street. Sometimes if the association is large enough (think AARP) they can ask for a private label plan that is similar to street plans.

That's hillarious because they all thought that they were (getting the member discount) ...

 

[Small Town ND]

They currently have a Group plan with BC/BS. The billing is then divided up between the all the business depending on what/how many employees have coverage.

I am thinking about contacting them about a different Health Option or a Self-Funded Option. In North Dakota, up until a couple of years ago, there really was only one health provider, BC/BS.

 

[ABC]

About 2 years ago I looked at setting up a health plan for the association of stand up comedians. No, I am not joking.
The association had over 500 members and it looked like we had about 200 interested.

No carrier would touch it except the limited liability companies.

As for self funding these types of plans that is a real long shot. I have only seen one self funded association plan and it went bust owing about $1,000,000 in claims. The state ended up going after the brokers that sold it.

With any association adverse selection is going to happen.

 

[leevena]

Self funding the association is a big problem which is why you structure it at the employer level. Setting up an self-funded program that aggregates the groups (such as a captive) can work. Each employer is issued it's own policy/contract by carrier and joins the captive. The costs (admin fee, stop-loss, claims funding )are rolled-up to look like a fully insured rate. This can be done with groups as small as 2 lives.