Associations, Memberships and Groups?

Discussion in 'Employee Benefits Forum' started by Tim Resnick, Aug 10, 2017.

  1. Tim Resnick
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    Tim Resnick Active Member

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    Hi Friends,

    Newby here.

    I was talking to a friend of mine who sells individual to small business people who are contractors, construction laborers, tile setters, Carpenters, etc. Apparently these ppl only insurance options are those offered by Obama Care and if they don't enroll by the due date, they will be out of luck.

    I'm not sure if this idea is correct or not but he suggested that if someone becomes a member of an organization (non-profit contractors org, etc), they can become illegible for group health?

    QUESTION: Is the concept of being an independent contractor and joining "a membership or Association" a viable way to qualify for Group Health Benefits?
     
  2. Tim Resnick
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    Tim Resnick Active Member

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    Dead air here,...but apparently if one joins a Contractors association, they can get a group plan (i found one in my area).
     
  3. junkman
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    junkman Well-Known Member

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    Association plans generally don't work because they either need to underwrite the individual apps or have everyone enrolled. Association members look at the assoc as 1 more possible coverage source, opt in as a last resort then opt out when something better comes along.

    A contractor "could" write a group for all of his W2 employees and frequent 1099 subs but most won't.
     
  4. yorkriver1
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    yorkriver1 Well-Known Member

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    If participation is an issue, see if any carriers offer an open enrollment with no participation requirements for small groups. I mentioned this on another thread. In our state, at least 2 of them do this from 11/15/17 to 12/15/17 for 1/1/18 enrollment.

    One of them doesn't have an employer contribution minimum limit, either.
     
  5. foxmarble
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    foxmarble Well-Known Member

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    I bet what you are finding is Alternative Funded platforms that require initial underwriting. So they are not traditional funded plans. I just went to a Annual meeting for a group of Charter Schools and saw how the performance of the plan going back to 2015 ran and it was fairly interesting.

    However not good for groups that you know have issues.
     
  6. leevena
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    leevena Well-Known Member

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    Generally speaking the comments made here are accurate. To add another thought, you may be seeing davis-bacon plans being offered as opposed to association. They are popular in the construction world.
     
  7. yorkriver1
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    yorkriver1 Well-Known Member

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    So the ineligibility question usually goes the other way, not being ineligible for group, more likely being unable to buy lowered cost individual coverage on the Marketplace if eligible at an employer group.

    If someone works for an employer that offers group insurance, they would most likely be ineligible for a tax credit under the ACA, based on plan cost vs income. If it's a small employer and the new coverage options for next year on individual are pretty awful, losing the ability to have a tax credit would have to be weighed against the cost/benefits of group, if they find a way to be eligible to purchase group coverage. This is going to be a topic for a number of my individual health clients.

    Some associations have medical underwriting for members purchasing coverage. Other associations essentially qualify the group for a discount or some extra benefits on a group policy issued with the normal rules for participation and employer contribution to employee premiums.

    Other postings have mentioned that a group formed with the sole purpose of buying insurance is not eligible to buy group insurance. I believe most if not all states would have that restriction as a law, and carriers would have the rule in their eligibility requirements. I taught insurance licensing for 12 years, and the restriction on sole purpose group formation is a state law in my state, so not only excluded in underwriting, but also illegal. Not implying anyone considering this, just taking care of that as a consideration.
     
    Last edited: Sep 14, 2017

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