Can a Group Form Their Own Group for the Sake of Health Ins?

[dbrown]

I'm new to health insurance and was asked by someone a question I cannot answer and was wondering if someone here would know...
The situation is:

Her husband works for a big employer - formed like a union. They're currently paying A LOT for insurance. Just over $6.00 hourly is being given to subsidize this insurance per employee by the employer. The employer is proposing that if you don't want their insurance, that $6/hr can go into a 401k. Or pay another $100+ weekly for the health insurance.

The question is: Can a group of these employees form their own group and purchase like a group?

Hoping you can help....

 

[leevena]

They cannot come together for the sole purpose of purchasing a group policy. Group can only be sponsored by a bonafide employer.

 

[kgmom219]

Why wouldn't they just decline the group and go on the FFM?

Am I missing something here?

 

[scagnt83]

Group can only be sponsored by a bonafide employer.

Not completely true. Associations that collect dues are able to form groups in most states. But the association cant exist just to provide insurance to its members, it must have a true purpose.

 

[Ann H]

I'm new to health insurance and was asked by someone a question I cannot answer and was wondering if someone here would know...
The situation is:

Her husband works for a big employer - formed like a union. They're currently paying A LOT for insurance. Just over $6.00 hourly is being given to subsidize this insurance per employee by the employer. The employer is proposing that if you don't want their insurance, that $6/hr can go into a 401k. Or pay another $100+ weekly for the health insurance.

The question is: Can a group of these employees form their own group and purchase like a group?

Hoping you can help....

Something doesn't sound right about the math. That means the employer is contributing $12,480 annually for the employees' health insurance. (You said, "just over $6.00 hourly is being given to subsidize this insurance per employee by the employer")

Perhaps that's what the employer is contributing to the family's insurance, rather than just the employees?

You mentioned an option of the employee paying $100 more weekly which is $5200 more per year (and I'm not sure how much the employee is contributing now).

Either way, if the Employer's contribution is this large, then the employer could cancel the group plan, pay the annual fine of $2,000 per employee (less 30), and put the rest in the 401k. Or give the rest as cash (taxable) and the employee can get their own coverage. Some may get subsidies if the employer cancelled the group plan. Some may put that cash bonus into an HSA fund, converting it to tax-deductible. Any of those options sound better than paying $12,000 for insurance, unless union regs require them to, or they need high-level benefits to attract and retain talent.

 

[yorkriver1]

Association plans, NAIC definition of eligibility:
Association Group Insurance Association Health Plans
Definition The NAIC outlines the following requirements for association
group insurance:
· “hall have at the outset a minimum of 100 persons
and have been organized and maintained in
good faith for purposes other than that of obtaining
health insurance.”
· “Shall have been in active existence for at least one
year;
· “And shall have a constitution and by-laws that
provide that (i) the association or associations hold
regular meetings . . . (ii) . . . collect dues or solicit
contributions from members, and (iii) the members
have voting privileges and representation on the
governing board and committees.”
http://www.cahi.org/cahi_contents/resources/pdf/n126agivahp.pdf
Each state most likely will have some version of the NAIC model law wording.

As an insurance instructor for pre-licensing, I go over this every time I teach a class, state law section. Check your state, but most will probably have some version of this.

 

[pdbrian]

I am assuming that this is a larger employer. If an employee were to waive off of the coverage, he could not get a subsidy on an exchange plan. The employer would give him $5200 a year which may cover the cost of an individual plan. What am I missing and why would they want to form an association just for the purpose of obtaining insurance? Do they not like the plan being offered or the expense of it? Math does not add up.

 

[ksurfer86]

Not completely true. Associations that collect dues are able to form groups in most states. But the association cant exist just to provide insurance to its members, it must have a true purpose.

This is interesting to me. What about benefits? Like life and accident and so on?? What carriers offer voluntary to associations like this aka elks clubs or moose lodge??

 

[scagnt83]

This is interesting to me. What about benefits? Like life and accident and so on?? What carriers offer voluntary to associations like this aka elks clubs or moose lodge??

Lots.... I have never written an association but many carriers accept them. LFG, NYL, Met, Guardian, MoO, UHC, Im sure there are many many more.