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SIGH OF RELIEF: Thermo King owner Wayne Smith saved his company $55,200 annually with a switch to a chamber health care plan.
SBJ photo by Wes Hamilton
SIGH OF RELIEF: Thermo King owner Wayne Smith saved his company $55,200 annually with a switch to a chamber health care plan.

Small Business, Big Savings: State chamber-led health care plans impact the market one year in

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Nearing its one-year anniversary, the health care plan through the Missouri Chamber of Commerce and Industry has impacted 2,100 individuals at almost 150 businesses in Springfield.

The self-funded health insurance program, called a multiple employer welfare arrangement, was created to give chamber members with under 50 employees affordable options for group health insurance in partnership with Anthem Blue Cross and Blue Shield, said Brendan Cossette, Missouri chamber chief operating officer. Out of Missouri’s 114 counties, Anthem covers 84, including Greene County.

Thermo King of Springfield LLC signed up for the program since it went live in November 2017.

“It certainly helped me save money,” said Wayne Smith, owner of Thermo King. “We basically got the same coverage but avoided a large premium increase.”

Thermo King was facing a 21 percent increase upon renewal of the company’s plan through Anthem. After switching to a chamber plan, the company saved $4,600 a month and $55,200 annually, said Ken Stephens, Employee Benefit Design LLC owner and Thermo King’s insurance broker.

“It allowed you to be a part of a larger group with reduced premiums as a result,” Smith said.

Thermo King remained with the same provider, Anthem, he said, through which the company previously had a preferred provider organization plan.

The Kaiser Family Foundation, a nonprofit focused on health care issues, said just 50 percent of small businesses, or companies with less than 50 employees, offered coverage in 2017, down from 59 percent in 2012.

Statewide, 9,000 individuals at 600 small businesses have received coverage, Cossette said.

Chamber officials talked with members and identified group health insurance as their biggest pain point, said Stephens.

“That’s what this was really created for – an alternative to small businesses having to go to the ACA plans.”

Stephens is one of a handful of insurance brokers locally who provides the health care plans.

The chamber’s health insurance program, with the goal of providing an affordable insurance option to its members, started with 11 insurance brokerages carrying the chamber plans. The number is now up to 14. In Springfield, Charles L. Crane Agency Co., Croley Insurance and Financial Inc., Ollis/Akers/Arney, Naught-Naught Insurance Agency Inc. and Employee Benefit Design are providers.

“We intend for a pretty robust expansion across the state eventually and given where health insurance is right now, we think this product is an advantageous one,” he said.

Anthem officials selected insurance brokers the company frequently works with and that handle small businesses with two to 50 employees, Stephens said.

“There’s a lot of training that goes into this, so that’s one reason they limited the distribution,” Stephens said.

Anthem started a multiple employer welfare arrangement program in Ohio in 2016, and it served as the basis for the Missouri program, Cossette said.

The Missouri chamber and Missouri Department of Insurance put up an undisclosed amount of reserves to launch the chamber program.

“It was a significant amount we had to invest in the program to ensure claims would be taken care of,” Cossette said.

Switch to savings
Chamber officials didn’t have a set number of businesses targeted for the first year.

“We weren’t entirely sure because this is a brand new product, but we were optimistic it would fill a gap in health insurance in the state,” Cossette said.

The chamber offers 10 PPO choices and three health savings account choices. Under a chamber plan, businesses with more than 10 employees can select up to three choices for employees.

Businesses must be a member of the Missouri chamber, or one of its affiliates, to enroll in its plan, Cossette said.

Chamber plans have a wide range of savings dependent upon the size of the company, Stephens said.

“It’s all over the board, but it’s significant. It can range from $1,000 a month to, with more employees, $6,000 to $7,000,” he said.

His company handles 130 employers on the chamber plan.

Before switching to the chamber’s health insurance plan, Springfield-based Howell Commercial Refrigeration Co. was scheduled to take on a 36 percent increase under its PPO plan. After enrolling with the chamber plan, the company saved over $13,700 a month for an annual savings of $164,544, said Stephens, who handles insurance plans for both Howell and Thermo King. Howell saved 2 percent from the previous year’s premiums.

“That was mostly our reason for switching,” said Janelle Henson, Howell’s office manager. “We pay 100 percent of premiums for our employees and half of their dependents.”

The company issued performance raises this year with the savings, Henson said.

With plans cutting off at 50 employees, Howell and its 45 staff members are getting close to not qualifying.

“We try to stay under the 50 because of that,” Henson said, adding that she was not sure what the company would do if it exceeded the cap.

At the Missouri chamber, Cossette said all of its 23 employees are under a chamber plan, and the organization’s rates lowered by 25 percent overall.

The chamber plans, which renew each June, have a deductible range of $1,000-$5,000 individually and a family range of $3,000-$10,500, according to chamber documents. “Until there’s something better, we intend to keep pushing it,” Cossette said.

Health care hurdles
While Howell and Thermo King officials say they haven’t faced any challenges with enrollment, getting the program off the ground hit a few bumps.

“It took us almost 18 months to get though all of the regulatory hurdles to offer the product,” Cossette said. “The biggest difficulty was dealing with state regulations and statutes.”

A rule limiting marketing of the chamber program to state and local chambers has been the biggest challenge, Stephens said.

“It’s like you have the best news ever, and you have a gag order,” he said. “If I could, I would buy an ad through (Springfield Business) Journal, I’d go on TV, I’d go on radio, I’d buy newspaper ads. I would sing it from the housetops. This thing is potentially a good deal for a lot of small businesses. But I can’t do that because of marketing restrictions.”

Two Missouri statutes state advertising and marketing of multiple employer self-insured health plans by insurance agents are a violation of the law.

A local chamber must be a member of the Missouri Chamber Federation in order to solicit the chamber’s program to businesses.

Another potential hurdle is the implementation of community-rated plans slated for January 2020. Community-related plans require all of a carrier’s insured customers in the same area pay the same premiums, Cossette said.

Former President Barack Obama’s Affordable Care Act plans are currently community rated now. Any plans grandfathered in before the ACA implemented are facing a switch to community-rated plans in January 2020, said Cossette.

“If they don’t delay the mandate to go to a community-rated plan, this will explode in growth because it will be a very good alternative to a community-rated plan,” Stephens said. “The future for having a solution to small business, even with this deadline looming, is bright because of plans like these.”

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