How to evaluate association health plan prospects
As benefit brokers consider the best ways to help clients and prospects take advantage of the expanded regulations that oversee association health plans, many might be wondering where to start.
In a previous column, I outlined how working with an attorney may provide an extra layer of support for agencies interested in making AHPs a substantial part of their business. I also noted the first step is to identify relevant prospects or groups that may be interested in forming an AHP.
However, when it comes to interested groups, not all are created equal. Many prospects may hear of the new regulations and ask whether this is a good fit for their organizations. Brokers may want to come up with an evaluation process to determine an answer. They may also want to determine if working with the group will be worth the agency’s time.
Here are a few things to think about when grading AHP prospects.
Brokers will likely want to focus their energy on “A” rated prospects, or those for whom AHPs make a lot of sense.
Groups that are already a part of an industry association — or know of one they could join — would be good prospects. AHPs will be especially attractive for groups that have a good business reason or financial motivation to invest in the AHP outside of obtaining cheaper health insurance costs.
Why? Even though the new regulations mean groups don’t have to have a common business interest, having one will likely ensure better success with the program.
An example is a group of franchisees. One challenge that franchisors often have is recruiting new franchisees, because typically each franchisee is on their own when it comes to purchasing and managing benefits. These groups may also already have a governing body that manages the list of franchisees.
Franchisors can make up the cost of the AHP through business development by recruiting new franchisees with a broader value proposition that includes being able to join the AHP. This provides another incentive to invest in the program.
An additional factor that brokers may want to consider is whether they have a good existing relationship with a decision-maker or influencer. Because AHPs are so new, there are likely to be some challenges in creating and implementing them. Brokers will likely need a high degree of buy-in from decision-makers to make this arrangement happen.
Groups that would perhaps receive a “B” grade when it comes to AHPs could be groups that already have an existing association but don’t share any common business motivations.
With less shared mutual business interest, building an AHP to meet the needs of disparate groups may be challenging.
Another factor could be a group with a current association, but one that you don’t have a relationship with or that is wary of becoming an early-adopter of AHPs. Again, these programs are new to many groups and brokers, and you will want to have an upfront conversation about this with a prospect.
Not so good opportunities
Groups in this category are not good prospects for AHPs. One example might be groups with no existing association or no clear business relationship outside of geography or industry. It will be more challenging to have to first create an association, and then after that implement an AHP.
The bottom line is that with so many “A” prospects out there, if you find that you are receiving inquiries from a “B” or “C” prospect, you may want to refocus. You can explain to the prospect that with so many unknowns, it may be better for their organization to wait until there is more clarity. They will most likely agree with you.