Some carriers issue health plans via association membership, others do not. It varies by state. Association plans are no better, or worse, than individually filed plans.
When a carrier opts to offer health insurance via an association this is usually for one reason . . . savings. Most state DOI's have deemer provisions that allow them to approve policies filed in another state that has similar laws to their own. This means a plan filed under a TX association can also be written in other states without filing an individually drafted policy (which is VERY expensive).
Sometimes plans are issued via an association set up by a marketing organization (such as American Health Underwriters). The association is simply another revenue source for the marketing organization as the dues are usually non-commissionable and the underlying cost of the "association benefits" are nominal.
Here are a few myths about association plans.
You cannot be cancelled for any reason or singled out for a rate increase.
Stop paying your premium and see how quickly your coverage is cancelled. Of course most (if not all) states prohibit a carrier from singling out an individual for rate increases just because they used the plan.
Association plans do not have to comply with state mandates.
Another myth. Look at the policies and you will see any number of riders or amendments that are state specific. Association health plans have to be filed & approved by the state DOI just as individually drafted plans.
Association plans have less protection on renewal against rate increases than individually filed plans.
Yes, this is a myth too. As a general rule, association plans have more pooling of rates (new & old) than do individually filed plans. As long as the LR experience is favorable for the association pool, the renewal rates may be more favorable than non-association plans.
It can also be worse.
All manual rates, both new & renewal, are filed with the state DOI. This is true for association & non-association plans. A policy holders renewal can be higher or lower than filed rates depending on the LR for the class of business.
Association plans are "better" than non-association plans.
Myth. There are benefits that are only available thru an association, such as the Time Suite Solutions add-on and those benefits (usually) do not coordinate with the underlying coverage. Just because you can get an accident benefit, or dental/vision, etc as part of the association package does not mean the plan is better . . . it just means it is different.
There are other myths I am overlooking. I am sure someone will remind me.
When a carrier opts to offer health insurance via an association this is usually for one reason . . . savings. Most state DOI's have deemer provisions that allow them to approve policies filed in another state that has similar laws to their own. This means a plan filed under a TX association can also be written in other states without filing an individually drafted policy (which is VERY expensive).
Sometimes plans are issued via an association set up by a marketing organization (such as American Health Underwriters). The association is simply another revenue source for the marketing organization as the dues are usually non-commissionable and the underlying cost of the "association benefits" are nominal.
Here are a few myths about association plans.
You cannot be cancelled for any reason or singled out for a rate increase.
Stop paying your premium and see how quickly your coverage is cancelled. Of course most (if not all) states prohibit a carrier from singling out an individual for rate increases just because they used the plan.
Association plans do not have to comply with state mandates.
Another myth. Look at the policies and you will see any number of riders or amendments that are state specific. Association health plans have to be filed & approved by the state DOI just as individually drafted plans.
Association plans have less protection on renewal against rate increases than individually filed plans.
Yes, this is a myth too. As a general rule, association plans have more pooling of rates (new & old) than do individually filed plans. As long as the LR experience is favorable for the association pool, the renewal rates may be more favorable than non-association plans.
It can also be worse.
All manual rates, both new & renewal, are filed with the state DOI. This is true for association & non-association plans. A policy holders renewal can be higher or lower than filed rates depending on the LR for the class of business.
Association plans are "better" than non-association plans.
Myth. There are benefits that are only available thru an association, such as the Time Suite Solutions add-on and those benefits (usually) do not coordinate with the underlying coverage. Just because you can get an accident benefit, or dental/vision, etc as part of the association package does not mean the plan is better . . . it just means it is different.
There are other myths I am overlooking. I am sure someone will remind me.
