But that hasn’t stopped a local Realtor association in Southern Alabama from coming up with its own solution. The Baldwin County Association of Realtors says it’s the first in the nation to offer group health, dental and vision insurance plans that treat its 2,300 members, who are largely independent contractors, as employees of the association.
“Other associations may have offered plans, but they usually had to be underwritten by the association or others,” Sheila Dodson, CEO of the Baldwin County association, told Inman in a phone interview.
Alabama’s state Realtor association offered a health plan, for instance, but if the premiums collected were not enough to cover the medical costs incurred by members, the association “could be held liable for some of that,” she said.
From Nov. 15 through Dec. 28, Baldwin Realtors will be able to sign up for coverage starting Feb, 1, 2019 through Blue Cross and Blue Shield of Alabama.
“Being able to offer health, dental, and vision insurance to our membership is one of the most defining accomplishments of my career,” Dodson said in a statement.
“Knowing that independent contractors are not able to provide for their families or themselves in this vital way has always been a difficult problem for the Realtor industry. It is great to partner with Blue Cross and Blue Shield to offer premium coverage for our members, affiliates, and their staffs.”
Health insurance is a top concern for many in the real estate industry. Approximately 86 percent of Realtors in the United States are independent contractors, according to NAR, meaning that, in a land where employer-based health insurance reigns, most agents are left to fend for themselves finding health care in the open market.
According to NAR’s 2018 Member Profile, 21 percent of Realtors are uninsured, 45 percent of Realtors pay for health insurance out of pocket and 30 percent are covered by a spouse or partner. Only 4 percent receive health coverage through their firm.
According to Troy Wilson, 2018 president of the Baldwin County association, members had long been asking for group health insurance plans, but “until recently it was never even an option.”
That changed in June, when the U.S. Department of Labor announced health care reform to modify the legal definition of “employer” to include “working owners” — i.e., self-employed individuals with no employees — and to allow small businesses and independent contractors, such as real estate agents and Realtors, to band together based on location or industry to strengthen their buying power into association health plans.
“The size of the pool was key to getting the great benefit, which needed to be 2,000 or more,” Wilson said in a phone interview.
The Baldwin County association’s health plans offer national coverage, so that even members who are residents of neighboring Florida, Georgia or Mississippi can be covered where they live, according to Dodson. And if members were to leave membership, they would be offered COBRA coverage just as any employee would, she added.
“An employee has always been able to be part of group insurance,” she said. “An independent contractor had to go to an exchange [such as an Affordable Care Act individual market exchange]. What this does is enable better rates and better coverage to those who are classified by the IRS as independent contractors.”
Other Realtor associations, such as the California Association of Realtors, offer their members health plans, but the plans don’t treat members as employees of the association or offer COBRA coverage to members, though some employees of members may be eligible for COBRA, CAR told Inman.
The Baldwin County association did not consider teaming up with another trade association, local Realtor association, the state Realtor association or NAR on this due to the logistics that would be involved, according to Wilson.
It was a “high priority” for the Baldwin association to be able to offer an AHP to its members for the beginning of the year and if the association tried to grow its pool, “we knew it would take longer,” he said.
“It’s no different than a consideration of a new software system. It’s not like anything like this exists anywhere out there. Someone needed to organize it,” Wilson said.
“We would be open to other options like this in the future,” he added. “Our assumption is that others are probably working on it too.”
Asked whether Baldwin Realtors’ was indeed the first Realtor association to offer group health insurance and whether there were any updates to a possible national solution, NAR spokesperson Jane Dollinger said in an emailed statement:
“NAR has long been advocating for health insurance solutions for real estate professionals, including association health plans. Legal uncertainty brought on by the pending lawsuit filed by a dozen attorneys general across the country, combined with varying state regulatory requirements currently makes it difficult to find and develop a national insurance option because of how such plans may be implemented and treated in each state,” she said.
“However, this means there has been broader success by state and local associations, such as through small group market options, association health plans or other insurance solutions. More success at the state and local levels will set the example for others to follow and lay the foundation for a potential national solution down the road.”
Under the reform, association health plans are to be governed by the same rules as private employer policies, not Affordable Care Act (a.k.a. Obamacare) rules, which means potentially cheaper coverage than what’s available in the ACA marketplace, but also potentially weaker protections.
This is why a dozen state attorneys general have sued the Trump administration in an effort to block the reform. They are afraid the cheaper, leaner plans will siphon off younger, healthier consumers from the ACA markets and that the new rule will lead to a spike in insurance fraud and insolvencies, according to Modern Healthcare.
The plans available to Baldwin Realtors, however, are ACA-compliant and cover the essential health benefits under the ACA, including prescription drugs, maternity care, and mental health and drug treatment. Members will also not be barred or charged more for pre-existing conditions, Wilson said.
“It is compliant. It covers everything. It offers the same coverage as if someone were to do open enrollment through Blue Cross [and] Blue Shield. All we’re doing is facilitating the group,” Wilson said.
The association’s health plans are potentially better for some members than individual or small group plans available through ACA exchanges because they may be cheaper overall and age won’t be a factor in cost, according to Wilson.
“The only condition to be allowed in the group coverage is you have to be a member of the association in good standing. There’s no health screening or anything like that. Everyone is charged the exact same,” regardless of age, gender, location, or job title, Wilson said. Affiliate members of the association — i.e. members who are not real estate licensees, such as mortgage brokers — are also eligible to participate, Wilson added.
Tim Hudnall, district account representative at Blue Cross and Blue Shield of Alabama, confirmed that Baldwin’s AHP was ACA compliant and that all essential benefits are covered. “That’s all we sell,” he said.
Asked whether the Baldwin association had to go through the state to create the AHP, Wilson said no, but that the trade group did hire a third-party vendor — Lockard & Williams Insurance Services Inc. — to supply a secure portal for enrollment and handle billing.
“That way the member is never compromised on any personal information and the association never has access to any information,” Wilson said.
What are the costs?
The Baldwin association offers two health plans, one with a $3,000 deductible annually that starts at $437 per month for an individual and one with a $500 deductible annually that starts at $525 per month for an individual.
Each of the two plans offer four coverage options: individual, individual and spouse, individual and a dependent, or full family coverage. For family coverage the deductibles go up to $6,000 and $1,000 respectively. The deductible does not apply to office visits, annual wellness exams or prescriptions. Vision and dental coverage can be purchased separately.
“If you’re only covering one person, it’s $525 for one person, if you and a spouse it’s maybe $100 more and then if a full family it’s probably like $1,100. But there’s no differentiation between member to member,” Wilson said.
The association is not subsidizing any of the plans and both are under Blue Cross and Blue Shield of Alabama.
“The other real benefit in group coverage is with a larger group you tend to have a more sustained premium year over year. You typically don’t get as much fluctuation in the premiums,” Wilson said.
The association is not sure how many of its members are uninsured. Nonetheless, Wilson believes the AHP will offer “a large portion of the association” a better option than what they have now.
“There are some people that have group coverage through a spouse or through another employer. For them those other options are going to be better,” Wilson said.
“But for roughly 40 or 45 percent of the association, this would be a better plan for them. Most importantly, it’s going to allow coverage for some people that never had an option before from an affordability standpoint.”
He knows of one member who has said the AHP will save him nearly $12,000 a year with better coverage. In his own case, Wilson currently has a Blue Cross and Blue Shield family plan and said he will save $2,340 annually on the new AHP plan and his deductible will be lower.
“Providing group health insurance benefits is going to be life changing for many of our members and their families,” Wilson said in a statement. “This type of benefit, when utilized, can deliver value daily that is impossible to fully quantify. I’m am very proud to be a part of the leadership team who assisted in this monumental initiative.“
Blue Cross and Blue Shield’s Hudnall said there was “no way” to compare the Baldwin association’s AHP costs to the cost of purchasing insurance through an ACA exchange because on the exchange, costs are based on an individual’s age, while in the AHP, the cost is based on the average age of the members as a whole.
Wilson said the AHP is written for an average age of 57 based on a census of the association, but he’s not sure if that reflects the actual average age of the membership. (The median age of Realtors overall is 54, according to NAR’s 2018 Member Profile.)
For younger people, costs would probably be lower on the ACA exchange, Hudnall said, while for older people he expected the AHP to be “pretty competitive.”
After seeing some of the insurance renewal letters the Baldwin association shared, Hudnall said, “This seems like it’s going to save some of the folks over there a lot of money.”
Anticipating ‘a lot of activity’
Other Realtor associations are likely to follow Baldwin’s lead. Hudnall said Blue Cross and Blue Shield of Alabama has been offering quotes to other Realtor associations and other trade associations in the state, but he’s not sure if any others have signed up.
“This is really new. I know it’s something that’s going to have a lot of activity. I imagine there will be more pretty soon,” he said.
Other Realtor associations in Alabama interested in an AHP should contact either Hudnall or a Blue Cross sales office, he added.
After that, the association will be asked to provide a census of its eligible members and affiliate members, including name, date of birth, ZIP code and whether the member would want individual or family coverage.
“I would provide a proposal based on that census information and the plan design we would discuss,” Hudnall said.
Because associations don’t have information on prior insurance claims to submit, then demographics — including age — are a portion of the consideration for the premium, according to Hudnall.
Groups with more older folks, such as Realtor associations, would typically be charged more than a trade association with younger members. “Older people tend to spend a little bit more in medical care,” he said.
The company aims to sign up close to 500 members in an AHP. “The more people in the plan the better stabilized it will be going forward,” Hudnall said.
Editor’s note: This story has been updated with a comment from NAR and with additional comments from Baldwin County Association of Realtors CEO Sheila Dodson to clarify that BCAOR says it’s the first Realtor association in the nation to offer association health plans that treat its independent contractor members as employees of the association.