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Michigan Dental Association to begin self-insuring health benefits for members

January 05, 2015

By Kelly Soderlund

Okemos, Mich. — The Michigan Dental Association will begin self-insuring health benefits for members, predicting it will save dentists and dental team members money over the plans available in the marketplace.

MDA used to offer its members and their employees an association insurance plan through Blue Cross Blue Shield. But once the federal government's Affordable Care Act was implemented, MDA Insurance, the for-profit subsidiary of the dental association, determined it would be better if members were part of a self-insured plan, called a Multiple Employer Welfare Arrangement, that didn't place them in a higher risk pool of patients, thus driving up their premiums, said Craig Start, president of MDA Insurance.

"The benefit is that we're able to avoid some of the more onerous provisions of the Affordable Care Act, which include some bigger taxes and combining risk pools from all walks of life," Mr. Start said. "We can have a risk pool for just dentists and their staff."

The logic is that if members were to remain in a commercially-insured plan, they would be in a risk pool that would include people in professions with higher risk jobs, such as construction workers. The risk pool would also include newly insured patients under the Affordable Care Act who may have put off expensive procedures or treatments while they were uninsured, thus driving up premiums.

Because this new plan will have the same participants as the old one, MDA Insurance officials know the historical benefit use, claim volume and risks in order to make fact-based assumptions on how to administer the new plan, Mr. Start said.  More than 2,500 dentists, their family members and their employees have already enrolled in the new insurance plan and Mr. Start expects more to come in every day. The coverage began Jan. 1.

The MDA is able to self-insure its members because it's taking a bunch of small businesses and combining them to become large enough to have the money to pay claim and administrative expenses, Mr. Start said. The plan will be governed by a board of MDA members and a majority of them must participate in the health plan.

"Dentists are typically considered small business owners with less than 50 employees," Mr. Start said. "That means they don't have to legally provide insurance to their employees. But of course they still want insurance for themselves and many want to provide insurance for their dental team members in order to attract and retain quality employees. This is a good option for that."

This plan is available to any MDA member dentists who are employers. The regulations for establishing the MEWA require that there be at least two employees eligible for the MDA Health Plan per participating employer and the dentist can count as one of those two. The other employee doesn't have to participate for the member dentist to be able to enroll.

"We think that this plan is going to be better and better over time compared to what's available on the insured market," Mr. Start said. "Already we're saving the members money but we expect the rates in the marketplace to keep going up under the Affordable Care Act."