Move helps small employers offer benefits to workers
LANSING — The Michigan Retailers Association wanted to offer its members a way to keep good employees in an industry that frequently struggles with high turnover.
The solution: a private health insurance exchange that retail employers can use to offer health benefits to employees.
The association launched MRA Private Insurance Exchange on July 1 for all members. The private exchange could prove particularly useful for small retailers that may not have the ability to afford group coverage but want to begin providing health benefits as a way to retain staff.
A small retailer using the private exchange can opt to provide a set amount to employees or pay a percentage of their monthly costs for benefits. Employees can use that amount to buy their own coverage on the exchange — which carries medical, vision, dental, and life and disability policies — based on what they want and need.
The association launched the new private exchange during a time of tight labor markets and low unemployment in Michigan. The exchange “helps address a clear need from members, particularly small retailers with only a few employees,” said Bill Hallan, executive vice president and COO for the Lansing-based Michigan Retailers Association.
“It still allows an employer to offer something to their employees,” Hallan said. “The workforce is ever-changing and if a retailer has to decide that, ‘Boy, I really need to keep my workforce consistent,’ benefits are often a way to keep and retain talent.
“With the low unemployment rate, when you’re trying to retain talent, instead of offering an extra dollar an hour, it may be a better benefit to your employees to offer some form of benefit dollars that they can use. They may value dental or vision insurance more than an extra dollar or two an hour.”
The MRA Private Insurance Exchange offers health policies from Grand Rapids-based Priority Health and Detroit-based Health Alliance Plan of Michigan, which is owned by Henry Ford Health System. The MRA separately from the private exchange continues to offer members group health coverage through Blue Cross Blue Shield of Michigan.
The 5,000-member MRA set up the private exchange using a technology platform provided by Jacksonville, Fla.-based Member Benefits, which formed similar arrangements with a number of trade associations and state bar associations across the U.S. and has “had a lot of success with it,” Hallan said.
“We’ve been able to measure the success of other like-minded organizations and we’ll be able to replicate that success here in Michigan,” he said.
Oftentimes, a retailer wants to begin providing health coverage to employees, “but the administration is often a headache and it can be expensive,” Hallan said. The partnership with Member Benefits provides a user-friendly platform for employers to set up coverage options and for employees to compare and buy policies, he said.
“We really wanted to simplify the process,” Hallan said. “An employer can go on and really customize a solution for their own needs. They can really customize a benefit solution for their workforce as they see fit.”
Offering plans from both Priority Health and HAP on the private exchange provides some flexibility to employers and employees to buy coverage through the association — options that didn’t exist in the past, Hallan said.
Priority Health worked with the MRA for more than a year to set up the private exchange, said Mike Jasperson, a vice president who oversees the health plan’s small group market in Michigan.
Participating in the MRA Private Insurance Exchange provides a new access point to the retail industry in Michigan, especially to small businesses, Jasperson said. The MRA’s membership base represents a similar target audience for Priority Health, consisting primarily of small businesses with a dozen or so employees, he said.
“So it’s a great fit from that perspective,” Jasperson said. “This is our target. We sell a lot of business to employers of that size, so it’s a great opportunity.”
Priority Health offers introductory plan options on the MRA Private Insurance Exchange with PPO and point-of-service (POS) policies. Available POS plans come with deductibles of $1,000 or $2,000, and the PPO plans on the private exchange have a $2,000 deductible.
Priority Health will consider adding HMO policies to the exchange in the future, Jasperson said. The PPO and POS plan are the most common policies sold to small employers, especially in Southeast Michigan, he said.
If the MRA Private Insurance Exchange proves successful, Priority Health could reach out to other trade associations in the state about similar ventures, Jasperson said.
Dental policies sold on the exchange come from Delta Dental. VSP provides the vision coverage, and life and disability policies are through Guardian Life Insurance Co. of America.