Health Insurance Program for Members in the Works

In the association business, it’s never a good idea to promise what you can’t deliver…but a “heads up” is always a good idea, especially if the “heads up” is something that is meaningful but requires plenty of advance notice.

With this disclaimer firmly in place, I’m hopeful that SMI can soon announce development of a health insurance program for regular members of the Institute.

SMI is one of six metalworking associations that are cooperating in the development of a health insurance program with the TrustMark Insurance Co. These six associations represent about 3,000 individual companies and about 18,500 individual employees. Those numbers spark interest with insurance companies.

When this program takes form, SMI member companies will have a new option for cost containment in one of the most difficult expense line items on each company’s budget: health insurance.

The program under development would be a PPO with several different options for deductibles and coverages. TrustMark would monitor the program and handle all claims, details and administration. Membership in SMI or any of the other metalworking organizations would be required for participation, but would not guarantee automatic coverage based on medical underwriting. However, preliminary rates could be extremely favorable to participating companies.

As the program evolves, each SMI member company would have to apply and face the underwriting process with individual rate development based on each company’s history and health status.

Interested springmaking companies would be enrolled via telephone with eligible employees submitting health history. Employees submitting applications that include special cases would be contacted directly by the insurance company, and rates would be established based on the overall status of each company’s employee pool.

The preliminary plan has already been approved by several members of the participating six associations.

The program will be rolled out in stages, depending on company size and location. Several states mandate specific requirements that would make it difficult to offer the program universally during the startup. Initially, the program will be offered in states that represent approximately 76 percent of the SMI membership. Our expectations are to offer the program nationwide, with a few exceptions, by the end of 2007. Company size (whether more or less than 50 employees) also creates complications that will need to be resolved. In 11 states, there are mandated regulations that make it virtually impossible to insure companies with less than 50 employees.

Of course, there are still issues to be considered. But the good will of these six associations takes advantage of our pooled resources. The program would be designed by metalworking companies for metalworking companies.

The eventual announcement of a health insurance program is not a “slam dunk.” But for the first time in recent history, there is a very real potential for a program that could provide some kind of relief from the heavy burden of covering health insurance for employees.

This column is being written in August for publication in late September. By the time you read this article (if you do), we’ll be much smarter in the status of the program and its parameters. By the time you read this, we may even be within a few weeks of launching the program. But with a high percentage of companies having a January 1 insurance renewal date, I suggest that the spring industry could have a new option by the time your company is ready to renew its insurance program.

The aforementioned information is a “heads up,” and hopefully by the time this publication is in your hands, it will be a promise.