Trenton is considering legislation to encourage more employers to join together and provide affordable health coverage to their workers by creating self-insured “multi-employer welfare associations,” or MEWAs.
And as this debate unfolds, the state’s oldest MEWA, the 69-year-old Association Master Trust, shows how a MEWA can succeed in the highly competitive health plan arena, thanks to a wide choice of plans and prices coupled with plenty of customer service to help members navigate the complex world of health care.
Harvey Mishkin joined Millburn-based AMT in 1987 and has been chief operating officer since 1993. He said the key is that AMT is striving to control administrative overhead and partnering with Horizon Blue Cross Blue Shield of New Jersey, which provides the doctor and hospital network and medical claims administration. As a result, it has managed to hold member health plan cost increases to low single-digits — at a time when many employers are struggling with soaring health care bills.
AMT is a not-for-profit that operates to benefit its members, so when there’s surplus in excess of what it needs to fund an ample financial reserve, some of that money goes back to the members, thus lowering their cost of health coverage. Mishkin said that, over the past three years, AMT has returned $9.5 million to its members.
Founded in 1945 by the New Jersey Fuel Merchants Association, it eventually opened its doors to other associations and in 1978 became the Association Master Trust, reflecting its diverse membership. Today, AMT’s 16 New Jersey associations include the New Jersey Independent Electrical Contractors Association, the New Jersey State League of Master Plumbers and the New Jersey Veterinary Medicine Association.
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“AMT was built for the purpose of helping employers create a solid benefit plan for themselves and their employees at the best cost possible; that has always been our philosophy,” Mishkin said.
And he said AMT would have no reason to exist if it didn’t give its member associations what they want: comprehensive, competitively priced health plans and a high degree of customer service for members who need help sorting out issues with coverage and claims.
AMT members aren’t locked into purchasing an AMT health plan, but are free to shop for health plans at AMT as well as on the traditional health insurance market.
“Our employers look at their costs every year, and if they don’t think we’re the right option, they can leave. Then a year later they can come back in,” Mishkin said. Most decide to stay: Mishkin said AMT has a 95 percent member retention rate.
AMT currently covers about 18,000 members: small business owners and their families, and the employees and their families. About half of those members are enrolled in AMT’s “exclusive provider network,” or EPO. The EPO provides access to about 22,000 doctors and hospitals in Horizon’s New Jersey network. In addition, EPO members can use the doctors and hospitals in the nationwide Blue Cross network.
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“This is really terrific when you think that our EPO gives you access to so many great doctors and hospitals across the country,” Mishkin said.
The EPO does not have an out-of-network benefit, so those who chose the EPO have to stay within the Blue network.
The EPO is one of about 40 plans that AMT offers. Some plans offer out-of-network benefits, and there is a variety of plans with varying levels of coverage and price.
Mishkin said the company’s overall rate increase for 2014, across all its plans, is 9.8 percent. The EPO plans, however, came in at 6 percent, thus significantly outperforming the overall rate increase. After accounting for refunds of excess surplus to members, net rate increases fall to the low single-digits.
Under current New Jersey law, MEWAs have to cover all state-mandated health benefits, even though the coverage they provide is self-funded. Generally, New Jersey’s mandates don’t apply to self-funded pans, which are regulated by federal law.
Sen. Robert Singer (R-Lakewood) is sponsoring a bill that would exempt large employers in a MEWA, those with 100 or more workers, from providing the state-mandated coverage. In some cases, the state mandates go beyond federal law, such as one that requires coverage of certain services to individuals with autism.
Singer argues that exempting large employers from the state mandates puts MEWAs on a level playing field with large employers that are big enough to self-insure their health care costs on their own, without going the MEWA route.
Mishkin said nearly all of his member employers have fewer than 100 workers, and covering the state mandates doesn’t prevent AMT from offering price-competitive health plans. He estimates that AMT can deliver as much as a 10 percent savings on health care costs, depending on the plans selected, to employers with a typical AMT group of workers with an average age in the 40s or early 50s.
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Sen. Joseph F. Vitale (D-Woodbridge), chair of the Senate Health Committee, is opposed to exempting large employers in MEWAs from state mandates. He said AMT “by all accounts runs a successful MEWA, and they are successful even under the current rules and regulations that some people are trying to change.”
Vitale added, “You can be a successful MEWA and do it efficiently and effectively” without reducing mandated benefits.
Mishkin said employers look to AMT to help give them an edge when hiring good workers.
A number of the AMT members employ technical workers, “and a lot of these techs can be hard to find,” Mishkin said. “Our members want to offer a good, solid benefit plan because that still makes a difference to get the employees you want.”
And then there’s the extra mile of customer service that AMT members receive.
Mishkin said Horizon fields the vast majority of phone inquiries, but AMT members who want additional attention will get it from the AMT staff.
“We have direct computer access right into the Horizon system so we can see exactly what has gone on with a claim, so that we can get it resolved,” Mishkin said. “This is part of the service we bring: These are association members and we really want to help them through the tough times.”
Mishkin added that Horizon provides “a whole litany of services to us, and they’re a big piece of the AMT product. We like Horizon’s ability to provide cutting-edge, quality programs: They have been at the forefront of trying to provide care for patients that delivers good results at the best possible cost.”
Eric DeGesero is executive vice president of the Fuel Merchants Association of New Jersey, which founded AMT’s predecessor organization back in 1945. He is also executive director of the New Jersey Independent Electrical Contractors, which just came on board a couple of years ago as one of AMT’s newest members.
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He said AMT “has to compete on its own merits to be successful, and we certainly do that.”
Depending on the plan choice, AMT may not always be the cheapest option, but “We offer great value in terms of the service that you get.” He said when a member calls AMT with a question, “You get the same person every time, and you establish a relationship with the person who handles your account. You can’t put a price on that value.”
He said AMT “offers competitive, comprehensive benefits to small businesses. That’s why we’re successful.”
DeGesero said AMT has “been providing benefits for almost 70 years to our members, and I’m quite proud of the way we’ve done it. Health coverage is so important, and it’s essential that we do it right. My kids are covered by this — I have a vested interest in how this program works that goes beyond lots of other issues of public policy.”
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