The MCAA's Association Healthcare Plan: Saving Members Thousands
By John Storto
Staffing is a huge challenge for small employers (defined as having less than 50 employees). The majority of small employers believe that providing health insurance is important to recruiting and retaining good employees. Yet most small employers do not provide health insurance today.
Despite the existence of the Affordable Care Act (or ACA, which is sometimes referred to as Obamacare), the number of small employers offering medical insurance to their employees dropped by more than 25% between 2008 and 2015. The reasons behind the drop were the high cost of insurance, the lack of plan design options, and the increased regulations (all a direct result of the ACA). This has hit the masonry industry especially hard in that 85% of Mason Contractors have between 2 and 50 employees.
After the Trump Administration’s failed attempt to repeal and replace Obamacare, it has taken numerous steps to address some of the harmful aspects. Most people are aware that the individual mandate penalty was reduced to $0. So, while technically the mandate has not been eliminated, it no longer has any teeth and likely will not be enforced. One other less well-known policy of the Trump Administration is to encourage the formation of Association Health Plans, allowing competition across state lines between insurance carriers.
In 2019 the MCAA was one of the first new Association Health Plan programs rolled out after the Trump Administration encouraged the formation of Association Health Plans to help small employers afford healthcare for their employees. Employers that joined our program found significant financial savings compared to buying health insurance in the open market, in some instances the savings meant the difference between being able to offer insurance or not offering it. Our first-year renewals have gone out and the renewal rates have proven to be below market, and the savings to our members have continued.
While the ACA did make it easier for those with high claims to obtain insurance coverage, it did so by making insurance more expensive, less flexible and more regulated for everyone. This is especially true for employers with between 2 and 50 employees. The ACA put into place various underwriting rules and risk pool requirements for insurance carriers selling contracts in the 2 to 50 employee market.
These rules increased the cost for insurance carriers to do business and they, in turn, increased the premium that employers pay. Many of these rules do not come into play for employers with more than 51 employees. Actuaries have indicated that the impact of these rules has increased the cost for small group employers between $1,900 and $4,000 per employee per year in cost.
The challenge for the small employer is clear, there is only so much money available for wages and benefits. Due to the high cost of the premium, employers often share the cost of the insurance plan with employees. With premiums so high in the insurance marketplace, medical plans for small employers can be so unaffordable to employees that many employers opt not to even offer coverage and just increase the wages they pay instead. It is generally held that employers with a benefits package have substantially better employee retention rates, enabling them to focus on their business as opposed to recruiting employees to address turnover issues.
Association Health Plans have more advantages than merely increasing competition between carriers, it also allows employers in the same industry to join together in purchasing healthcare and be treated like one large group. This conversion to a single large group enables a small employer the ability to buy medical coverage and avoid the $1,900-$4,000 compliance cost of the ACA. These built-in savings can be the difference between offering a benefits package or going without.
The MCAA Association Health Plan
Last year the MCAA developed one of the first Association Health Plans in response to the Trump Administration’s encouragement. 85% of the MCAA members have between 2 and 50 employees, so the need for Mason Contractors is especially great. We interviewed a number of insurance carriers and decided the best partner for the MCAA Association Health Plan was United Healthcare.
Due to the size of our membership base, we are able to offer a substantial package of benefit options that provides a great deal of flexibility, lower costs, and avoids some of the compliance issues within the ACA that have made health insurance programs unaffordable to many Mason Contractors today.
United Healthcare offers our members more than 30 plans to choose amongst, with benefits ranging from $0 deductible plans with $20 office visit copays, to plans compatible with Health Savings Accounts (H.S.A.s) including deductibles as high as $6,350. Rx benefits range from $0 - $15 copays for preferred drugs and $35 - $250 copays for non-preferred drugs. Employers can offer up to 5 plans to their employees, therefore there is bound to be a plan (or combination of plans) that meets any employer’s needs.
The United Healthcare network of providers includes over 5,500 Hospitals, 900,000 Doctors/Health Professionals, and 2,200 Convenience Care Centers. This is amongst the largest national medical networks and includes more than 90% of all providers available in the US.
In addition to medical plans, we offer 4 dental plans, 2 vision plans, life insurance and disability coverage (with options available on a guaranteed issue basis). All of these options enable a Mason Contractor to develop a benefits package that rivals the largest of employers in the construction trades.
The 2019 Rollout
Our first groups were written on January 1, 2019. Those initial groups have seen remarkable savings and the first round of renewals have been released, with our members still enjoying substantial savings versus buying insurance directly from the insurance carriers. The MCAA program enabled some of these members to offer a medical plan for the first time. Other groups were able to add additional benefits like dental and vision, while still saving money from their prior medical plan.
There are a few requirements to be able to join the MCAA program:
- Must have at least 2 full-time employees (at least one of which is a non-spousal common-law employee and enrolled on the plan
- 50% of eligible employees (not covered elsewhere) participate in the plan
- The employer pays a minimum of 50% of the single employee premium
- Must be a member in good standing with the MCAA
Obtaining a Proposal
The MCAA program is available through any licensed broker appointed with United Healthcare. We encourage all of our members (and potential members) to obtain a proposal and see how much they can save by joining our program.
Obtaining a proposal is easy, and you can work through any insurance broker of your choice. If you do not have an insurance broker, you can work directly with the brokers that built the plan, Assurance Agency at MCAA-EB@assuranceagency.com.
The information needed to produce a quote is:
- a detailed census of all the employees and dependents that will be offered the plan, Company Street Address
- Company Tax Identification number
- and information regarding your current plan (plan design, insurance carrier, renewal date, etc).
Any insurance broker appointed with United Healthcare can obtain an MCAA proposal, the quote request form that the broker will need to complete is available at https://www.masoncontractors.org/association-health-plan/ Brokers can also obtain proposals directly from their contacts at United Healthcare, by asking for a proposal for the MCAA Association Health Plan. Of course, if your broker has any difficulty obtaining a proposal we would be happy to assist them.
In summary, the MCAA developed one of the first association health plans available in the construction trades, enrolling its first groups in January 2019. Contractors that joined the program have found substantial savings, and the first year’s renewals remain low so those savings compared to the medical insurance marketplace continue. Any Mason Contractor is eligible to obtain a proposal either through their broker or directly from the brokers that built the program. There is no obligation to buy insurance in order to obtain a proposal, therefore we encourage all of our members to get a quote and see what their savings would look like.
About the Author
John P. Storto is a Principal at Assurance Agency, Ltd.