LDA Health Plan Trust FAQ’s (as of September 1, 2018)
Is the LDA going to again offer a health insurance plan for members?
The changes in the insurance marketplace resulting from implementation of the Affordable Care Act (a.k.a. ACA, or Obamacare) made it very difficult for ANY association to offer health insurance benefits to their members. Nonetheless, LDA has been working for a several years now on innovative ways to address those challenges and again offer a health insurance plan to our members and will be offering coverage to our members effective January 1, 2019.
When will members be able to apply for coverage under an LDAHPT plan?
The plan will begin accepting applications on or about October 1, 2018.
Why did it take so long to create new LDA members’ health insurance plan?
The only viable option available to the LDA in the current environment was basically to create our own health insurance company. This is in the form of a type of self-insured plan called a Multiple Employers Welfare Arrangement (MEWA). MEWAs are often more capital-intensive to start and more risky to operate than other types of insurance plans. Accordingly, LDA had to first pass legislation to make it easier for an association of professionals to form a viable MEWA. We also engaged consultants, actuaries and lawyers to assemble the mountains of necessary documentation, negotiated contracts with a number of vendors and subsequently filed an extensive application with the Louisiana Department of Insurance to obtain a license to launch LDA Health Plan Trust (LDAHPT), a MEWA exclusively for LDA members. Partly because all this was completely unique in this state (and in many ways, anywhere), there were a number of unanticipated delays.
What about the new Department of Labor rules issued in response to President Trump’s executive order allowing for the creation of Association Health Plans (AHPs) that provide health insurance to members in multiple states? Wouldn’t that enable LDA to create a plan like it once had and get it up and running sooner?
The new rules passed by the Departments of Labor (DOL) regarding AHPs were intended to improve access, increase choices and lower costs for healthcare by making it easier to form AHPs. In many ways, the rules actually DO expand the opportunities to create AHPs. This is mainly accomplished by loosening the qualifications for an association to be eligible to form an AHP. Some new associations could even be formed with the creation of AHPs for their members being a main reason for their existence. However, AHPs that operated under the new rules would be subject to some requirements of the ACA and HIPAA that don’t apply to AHPs operating under current DOL guidance. Not having to comply with those ACA and HIPAA requirements should allow a smaller, start-up AHP like the LDAHPT to offer significantly lower premiums plans than it would otherwise be able to offer to many LDA members for benefits comparable to their current plans. Since the new DOL rules give AHPs the option of operating under the old guidance or the new rules, LDAHPT will therefore operate under the old guidance. This should ensure the lowest possible premium rates for at least some LDA members and optimal conditions for LDAHPT to succeed and grow to eventually be an excellent option for nearly all LDA members.
How will the LDAHPT plan compare to the plans on the market today?
LDAHPT intends to have several plan options with benefits that should be comparable to the types of plans our endorsed agency, Brown & Brown, has indicated the majority of LDA members are currently using for coverage. These should include several high deductible, HSA-eligible plans plus a couple of lower deductible co-pay plans. Final rates are not yet set. But, the LDAHPT Trustees are fairly confident we can offer rates to at least SOME members that are significantly lower than for plans with comparable benefits from major carriers (e.g., Blue Cross). It is important to note that one of the major differences between a self-insured plan like the LDAHPT intends to offer and other plans is that the underwriting is more extensive and covers more criteria. So, the rates for an LDAHPT plan will likely range from significantly lower than comparable plans to somewhat higher, depending upon the underwriting on each application. Put another way, the LDAHPT plan will not be a great solution for all LDA members. There simply is no viable way at this time to create something that would address the needs of all LDA members. But, the LDA Board of Directors felt it was important for the LDA to try to help as many members as realistically possible. And, the hope is that a successful LDAHPT will evolve into an affordable option for an ever-increasing number of members.
Will an LDA plan include both group and individual coverage options?
No. A MEWA is designed for employers to offer coverage to employees. So, the only LDA plan option will be group coverage. However, THIS DOES NOT MEAN THAT AN LDA MEMBER WILL HAVE TO PAY TO COVER HIS/HER EMPLOYEES IN AN LDA PLAN. Basically, an employer in a MEWA has to make the coverage available to his/her employees, but can pay all the premium, part of the premium or none of it. And, if all employees decline the coverage, the employer can form a group of one (him/herself). The LDA’s endorsed agency, Brown & Brown, will assist LDA members in all the details required to tailor a plan for each practice.