When does an Association benefit plan make sense?
In short, the answer should always be. However, this is seldom the case. Many companies have experienced that there’s a premium to work through an Association benefit plan. Many companies have experienced high administration fees, one-size-fits-all approach, limited service capabilities, ineffective regional coverage and limited supporting technology platforms. Many feel it is great for individuals or tiny companies, yet it becomes cost-prohibitive for companies as they hit some critical mass in size.
Benefit Plan Design Unique to Each Member Company
Each company is unique and deserves a unique approach to managing its benefits plan. Companies have varying budgets, risk tolerance and business strategies. A benefit plan that offers a one-size-fits-all solution is destined to fail and serve only a handful of its members.
Each member needs to set up its own plan. It may take more time, but an Association’s membership will be served much more adequately if a plan design is unique to each member company.
Volume Pricing for Benefit Plans
The sum of an Association’s members should benefit from its size and buying capability, thus spreading the risk of its membership.
This should result in greater value-added services and better rates instead of greater fees.
Guaranteed Service Levels
Membership should have its privileges. Benchmarking of service levels should be discussed, assessed and understood. Your members should feel like an elite class, and expectation of service levels should be guaranteed.
Sponsorship opportunities back to the Association
Once an Association plan hits a critical mass, they should look at rebate programs back to the Association. This should be completely transparent. These rebates can help to subsidize membership fees, education programs or any other service that membership feels would be of value.
National Network of Independent Benefit Consultants
Being able to leverage a national network of benefit consultants allows for service levels to be upheld and different options for members to access.
Too many times, the Association benefit plan doesn’t have an extensive enough network or all members are funnelled through one contact point.
By having a national network of consultants allows for the familiarity of provincial or regional legislation as the rules about benefits is very different from region to region.
Integrated Technology Platform
By utilizing an integrated technology platform, this will provide consistency from member to member. Ensure that you see a demonstration of this system to make sure its ease of use, training, individual and company interface and support mechanisms in place.
Benefit Plan Benchmarking and Reporting
This is something that both the Association and its members can find useful when it comes to industry hiring practices, utilization and compensation metrics.
Medically Underwritten Benefit Plans
This is fairly standard with groups of five or more, but what happens if you’re a sole practitioner or only have a couple of employees. Some Association plans have a huge premium associated with small groups.
Managing Other Association Benefit Plans
Managing an Association is not like managing a group plan. There are several different variables at play, and you want to appeal to the entire membership. Talk to other Associations that your provider is dealing with and see the level of satisfaction from the Association level as well as the membership level. Try to mirror a comparison as close in scope and scale to the plan you’re trying to administer.
10. Marketing strategies
Gaining access to an Association’s membership is a privilege and not a right. A partnership between the Association and the Administration company needs to take place for an Association benefit plan to be effective. This results in regular strategy meetings on how to market to members and increase the value to its members. Clear expectations need to be discussed and defined to ensure the program is successful to the Association, its members and the Plan Administration companies.
11. Value-Added Services for Benefit Plan Members
Depending upon the size of the Association, the value-added services can be extensive and valuable to its membership. These are the components that likely the member companies would have difficulty accessing if going to the marketplace on their own. Could you make sure they are meaningful?
Chris Coulter is the Founder and President of The Finish Line Group. He works with business owners to leverage their businesses to increase their wealth, reduce corporate and personal taxes, create viable succession strategies, enable employee retention strategies and allow them to exit their businesses on their terms.
Chris’ passion for what he does evolve from the mistakes he made in his first business; by not diversifying his risk and not utilizing a lot of the opportunities within his business to create significant wealth. Chris found out the difficult way and now educates business owners on how to avoid many of his former oversights and ultimately control where their finish line ends.
Association Benefit Plan