LAS VEGAS — The Tire Industry Association (TIA) introduced a new health-care insurance benefit during the recent Specialty Equipment Market Association (SEMA) show, addressing one of its membership's top concerns.
"It's so needed," TIA CEO Roy Littlefield said. When going to meetings, whether it be a major convention, a state convention or a TIA conference and talking to dealers, he said, one of their top concerns, if not the No. 1 concern, is health care.
Tire dealers, he noted, are unusual in that they, in general, try and provide employees with health care, but with health-care costs spiraling higher, TIA's tire dealer members, like many small-business owners, have found themselves struggling to find strong benefits at affordable rates.
"I give them credit because I don't think there are many small-business associations where members are that concerned about it for their employees, but they are in this industry," Mr. Littlefield said.
TIA began tackling the health-care issue in earnest about seven months ago, ultimately forming an alliance with National General Benefits Solutions (NGBS) to provide members with flexible group health-insurance plans designed for small- to mid-sized businesses ranging in size from two employees to 250.
Working with Tim Chandler, of Timothy A. Chandler III Innovative Insurance Brokerage in Bowie, Md., TIA looked at a number of different health-care plans before settling on NGBS, which Mr. Chandler said "seemed like a pretty solid deal."
The NGBS program, he said, checked off all the boxes. It is designed for small- to mid-sized businesses, provides premium savings on average of 30 to 40 percent and can be pushed out nationally because the program is covered by A-rated health care providers Cigna Health & Life Insurance Co. and Aetna Inc.
The reason NGBS can offer reduced premiums is that it is not fully insured, Mr. Chandler said, explaining that fully insured plans are not tailored toward small- and mid-sized business owners. They are a one-size-fits-all program, he said, where all participants pay the same premium, whether they use the insurance or need that much insurance.
Fully insured plans are what's offered through the Affordable Care Act, he said. They are guaranteed issues, meaning the insurance company doesn't care how sick you are, they still have to take you.
"That's what most companies have, and you are going to pay for that," Mr. Chandler said. "That's why it is so expensive, because it's a guaranteed issue."
The difference with the NGBS plan is that it is self-funded and thus able to offer lower premiums because participants have to go through an underwriting process where insurance companies assess the health risks of the company's employees.
"That's the only difference," said Mr. Chandler, who works out of TIA's offices in Bowie as an independent contractor managing the association's health benefits.
"We actually underwrite our applications so we know what our clients have and what they don't have throughout the underwriting process. Now, because of that, if they allow us to underwrite their individuals, then you get a very steep discount because that means, obviously, you're healthy and you are able to qualify."
As long as there are no serious health issues in the company, there should be no reason why the owner of a small- to mid-sized business wouldn't see a significant savings, he said.
Mr. Littlefield said TIA is enthused about the plan because of the opportunity for insured companies to get money back every year, and because participants hopefully will have better control on long-term care and increases from year to year.
NGBS will offer TIA members several options to meet their health care needs, including a:
Core Value Plan — a reference-based pricing plan, meaning it pays providers based on a multiple of the Medicare reimbursement rate (or other derived equivalent) regardless of the billed amount. No networks are associated with this plan, and members can choose any provider. "Core Value's rates are often lower than traditional self-funded plans, and that helps you save on your monthly costs," TIA said.
Core Value Flex — a new level-funded reference-based pricing option that allows participants to chose a reference-based pricing plan with the option of switching to a PPO network mid-year without a change in the monthly premium.
Mr. Chandler said reaction to the plan has been "overwhelming," in the weeks since its introduction. Of 20 inquiries, more than half have submitted paperwork to receive a quote.
But with the program so new, Mr. Chandler said its potential isn't yet known.
"But what I can say is the number of people who have inquired is crazy. It's phenomenal. That means it's definitely been a big topic on people's minds, and it is definitely an opportunity for us to try and help people save some money."