We recently interviewed John Sarno, the President of Employers Association of New Jersey (EANJ), which is a very successful association for small businesses. EANJ provides HR training and support for various HR issues for small businesses located throughout New Jersey.
In addition, EANJ has an extremely competitive health insurance program, 401(k), and an Employee Assistance Program for their member employers. These benefit plans are organized under a MEWA, which EANJ sponsors.
Sponsoring a MEWA is a big commitment for an association. The goal is to provide lower cost medical insurance for small business association members. To that end, the health plan has to grow into 1,000 lives in order to have a spread of risk, which keeps the cost of coverage competitive.
Many MEWAs do not grow as big as they should. We have spoken with MEWAs that are only hundreds, or thousands, of lives.
When speaking with him, Sarno discussed some of the key elements of their growth, which provide coverage for tens of thousands of lives.
Sarno stressed that the association has to have a mission other than providing insurance. The association has to provide value and have a mission that its members respond to and engage with. In the case of EANJ, HR compliance is its association’s core mission, which is a very difficult thing for small businesses to navigate.
The other pillar of success is communication. The association has to communicate effectively with its members, in order to interest members to obtain a quote for the health plan, and hopefully join.
Again, if there is a purpose other than providing the insurance, the communication is ongoing and part of a bigger value proposition. This approach is almost always missed by commercial producers, because the healthcare purchase is typically transactional, not relationship-driven.
Having that, there is a role for transactional communication to extend to brokers who may sell the health insurance for the MEWA. “One has to be very selective on who you work with and vet them very closely. Then you have to offer ongoing training and support so the broker understands the product and the mission of the association.”
When your business model is based on relationships and value, not just on price, there has to be a win-win for all. The association wins by growth, the MEWA with premiums/more lives, the insurance broker with sales, and most importantly, the member and its employees receive great health insurance at competitive prices. “We can’t work with brokers who don’t think and act in this way,” he says.
Trade associations can also offer other solutions to their member employers. Besides health insurance, EANJ offers group 401(k). This allows the small business to relieve itself of the fiduciary exposures, lower its admin costs, and provide professional money management. This has big appeal for small businesses, which often shy away from offering 401(k) plans. In addition, EANJ offers an Employee Assistance Program (EAP).
EAPs help employees with their personal issues, such as an illness, divorce, or other significant life events. EAPs are very helpful for the small business morale and absenteeism.
EANJ has a total solution for its members and their HR needs; this is another reason why they are growing. Another takeaway for MEWAs who want to grow is to always look for solutions for members.