Need Help - Competing Against Association for Group Health Biz

[insurehound]

So I had an appointment set up to enroll a new Group this week. Just got call from owner who said that they are looking at one more late-entry option, which is the ABC (Associated Builders & Contractors). Does anyone know how to compete against an association like this?

Of course I have done a lot of work on this Group and am disappointed with this news.

 

[warrenins]

Couple of thoughts off the top of my head. I'm not sure what state you are in but if this is set up as a "trust/self funded" or MEWA (Multiple Employer Welfare Arrangement) they may not be entitled to participate in the state insolvency pool. In other words if they go belly up claims go unpaid. From the looks of the website they are fully insured but it also looks like they act just like a broker would for several of their products-ABC Merit Choice (HMO POS etc)Secondly, remind the owner that they will have no say so if the association decides to switch carriers at renewal, other than to pull out and based on medical conditions that may arise in the group that may not be an option financially.
It's really hard for me to speculate without seeing the make-up of the plan and how it is funded and administered but those are a few thoughts. I haven't seen too many association plans in Georgia worth their salt with the exception of the Bankers Association Plan and maybe the Printers Association but I haven't run across them in a while

 

[insurehound]

Secondly, remind the owner that they will have no say so if the association decides to switch carriers at renewal, other than to pull out and based on medical conditions that may arise in the group that may not be an option financially.

Thanks for your thoughts. Not sure I understand the "medical conditions" point your making. Are you saying their RAF may not be very good if they decide to pull out of the association?

Do you know what happens if the association looses their carrier? Can that get sticky?

Thanks again!

 

[somarco]

Most of the association plans these days are nothing more than an endorsement of a particular carrier. True, insured group plans exclusively for members are mostly a thing of the past.

I handled several self funded ones years ago and that was the only way to fly when you had a solid TPA running it. The rules changed and self funded association plans are all but extinct.

Many times association endorsed plans provide a kickback to the ED or association and that fee has to be reflected somewhere in the rates.

The GA Bankers was a very well run plan at one time, handled by a TPA out of Douglasville. Forgot all about them. Don't know if he is still involved or not (and can't recall his name). Perhaps you will refresh my memory.

As indicated, most of the plans have run their course and are not worth having. If someone wants to buy an association plan I let them then call them back in a few months to a year and ask "how's it working for you" and leave it at that.
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Not sure I understand the "medical conditions" point your making. Are you saying their RAF may not be very good if they decide to pull out of the association?

Looking at abc.org it appears all the association does is shop coverage for their members. I may have missed it, but didn't see any evidence of one particular endorsed plan.

Small employers who join an association and then later pull out usually don't have a problem finding other group coverage. Larger plans (50+ lives) may have challenges finding a carrier since they will not have group experience to provide to a new carrier.

Association plans usually start off fine then crash & burn. As rates increase, healthy groups leave and the sick ones stay behind. Eventually you have a death spiral.