Leave it to the Show Me State to lead the way with ground-breaking health care insurance solutions using market-based principles. The Missouri Chamber of Commerce has announced it will offer a modified version of self-insurance to small group employers stung by rising premium costs.
According to a recent Missouri Chamber survey, one of three small employers in the state can’t afford to offer health benefits to their employees. The chamber aims to correct that situation with Missouri ChamberCare: a cost-management program allowing employers to stabilize insurance costs by combining self-insurance and traditional private insurance contracts into one customized package. The “Care” in the program name stands for Customized Approach for Responsive Employers.
The plan works very much like the Employee Retirement Income Security Act (ERISA) of 1974, which makes it possible for major corporations to self-insure for health care. Like ERISA, ChamberCare will allow employers to cover the cost of claims up to a certain amount, called a stop-loss. Once the contractual stop-loss is reached, a high-deductible insurance policy pays the amount over the stop-loss. The stop-loss is a very customizable feature tailored to fit the financial capabilities and individual needs of the small group employer.
In a press interview, Missouri Chamber of Commerce President Dan Mehan explained the cost advantages of the plan. “Employers find that if you pay as you go, instead of paying an insurance company in advance, you can cut costs substantially.”
The St. Louis Post-Dispatch reported a dramatic example of how the plan would work. ASI Signage Systems of St. Louis, which adopted a version of ChamberCare on its own before the idea was presented to the Chamber, saved $17,000 over three years of small group insurance premiums, said company spokesperson Mark Scott. The company has also avoided having to increase insurance premiums for its 25 employees. The firm has a $3,000 stop-loss on each employee, after which an insurance company picks up the rest, less deductibles.
The ChamberCare plan was developed by Howard Danzig and Kenneth Nicklas, two insurance brokers who are also chamber members. They marketed the plan to individual clients, including ASI Signage, before selling the Chamber on the idea. The Chamber-adopted plan will be administered by their brokerage firms, Danzig Insurance Company of St. Louis and Nicklas Financial Companies of Jefferson City, Missouri.
No other state chamber offers such an approach to market-based, small group health insurance. The Missouri Chamber of Commerce conducted statewide seminars in June to explain the new ChamberCare program.
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