5 Critical Components of an Association Health Plan

Mike Carlson

Program Manager - Builders Association Health Plan

By way of background, my firm manages Association Programs (often times identified as an independent Private Exchange).  Each Association Program consists of multiple satellites/hubs with sometimes, different needs at each.  With the leadership from each satellite, we collaborate on the delivery of services that require consensus/consistency.  Through some hard-earned lessons, we have identified the components that must exist to maintain/grow revenue.

Being the custodian of group Medical, Dental, Vision, Voluntary and Life Insurance programs, I have learned some valuable lessons.  These lessons have revealed five components that are “core” to Association Programs or Private Exchanges.  Although our programs are constantly evolving, following are the lessons I have learned in both managing and being managed by our customer.

Lesson 1: Communication                                                   

The first component of a successful Association Program is communication.  Not surprisingly, it’s also the hardest thing to quantify, judge, or measure.  What I mean is this - If I could reboot my Association relationships, I would begin anew by asking each customer, “what do you want and how do you want to hear about it.”  Each participant in the decision tree may (and probably does) have needs that differ from his/her contemporaries.  These needs are less immediate than 1) generate revenue, 2) look professional, 3) be easy and 4) make happy.....but they are needs nonetheless.  Determining those needs and establishing guidelines for communicating results is huge.

Lesson 2: Member Satisfaction

The "customer-service" element is the second most critical component.  Association business is loyal business if the population feels connected.  Our goal is to make questions/problems go away quickly.  If accomplished, customer persistency is high.

Lesson 3: Administration

The administration of your Association Program may not garner the "sizzle" of new revenue but a lacking of administration can destroy your chances for success.  Elements like decision-making software, Voluntary product choices, ACA reporting, COBRA administration, K-1 filing, 5500’s and the heart pounding adds/changes/deletions won’t garner a congratulatory slap on the back; but unless your program makes life easier for the employer groups/plan participants, you aren’t going to grow.

Lesson 4: Marketing

The term “marketing” covers a lot of ground.  Is the expression "covers all manner of sins" appropriate?  "Marketing" is too general of a word to describe the engine of the Association Program.  Are we talking new sales or collateral or events or media or ad's or enrollment forms or....?

In brief, marketing means different things to different people.  Every customer has a unique skill set which makes this process customizable. As with communication, a question around marketing could be “what do you want to say, how/where do you want to say it and how do we measure?”

Lesson 5: Product Portfolio

You wouldn’t think plans and benefits would come last on my list but the products and prices are generally the easiest of the essential components.  The plans and benefits are generally a reflection of the Association culture, the Region and the sophistication of the users.  That being said, you still need a skilled market-evaluator, actuary and consultant to create a solid plan/benefit foundation.

About The Author:

Mike Carlson has 20 years of Insurance industry experience, ranging in responsibilities from sales representative to Vice President and public speaking/presentation specialist. The first 15 years were spent at various levels of the delivery system. As a Life, Disability and Vision Insurance rep, he was awarded sales accolades while serving as a sales representative, regional manager and vice-president. Mike’s capabilities include customer service, sales and strategic approach to revenue development.