Union-linked GR insurance firm focused on cost
Associated Mutual, a Grand Rapids-based insurance company since 1938, has named Timothy S. Spink as its president.
In addition to his new role, Spink will remain as chief executive officer of MEBS Inc., a third-party employee-benefits administrator that has the same owners as Associated.
Associated offers insurance for health care, prescription drugs, dental, vision, life and disability benefits, and provides coverage for 45,000 individuals, most of them in Michigan but about 10 percent in Ohio.
Associated caters to the needs of employers, associations, Taft-Hartley trust funds, voluntary employee beneficiary associations, multiple employer welfare agreements, and other similar groups, according to its announcement.
Associated is controlled by the Michigan State AFL-CIO Public Employee Trust, a sub-fund of MEMBA — a voluntary employee beneficiary association — servicing the health care needs of the members of the Michigan State AFL-CIO, American Federation of State & County Municipal Employees Council 25, the American Federation of Teachers – Michigan, International Union of Operating Engineers Local 324, and Service Employees International Union.
MEBS’ clients “are the employers, because they buy benefits on behalf of the employees,” said Spink.
“We work with management, without question, because they are our clients, but we exist for the benefit of our members,” said Spink, “and so we’re looking for better and more creative ways to maintain benefits for our membership in a way that’s fiscally responsible.”
Associated Mutual is “unique” among insurance companies in Michigan, he said, because of its organizational structure, and it is growing.
“We’ve finally grown beyond small,” said Spink, who has been with MEBS Inc. for two years.
Spink said it seems that the traditional way of saving money on employee benefits is “always raising co-pays, always raising deductibles, increasing the amount the employee has to put into the insurance.”
What benefit plan managers often fail to consider are ways to encourage employees to make decisions that will save them and the employer money at the same time.
“For example, you can go to a hospital and pay $2,000 for an MRI. You can go to a clinic — the same machine, the same person reading the results — and pay $750.”
MEBS tries to educate its membership to be “true consumers of health care.”
“We also try to build our plans in ways that encourage the behavior we want — and not just trying to shift cost,” he added. That could mean coverage that does not require a co-pay for an MRI at a clinic but requires a $200 co-pay for an MRI at a hospital.
However, “quality is important, not just price,” he said.
Prescription drugs are another major example of the types of costs insurance carriers are struggling to control.
“A typical labor plan — and formerly a typical plan, in general — was a $10 co-pay for generic and $20 for formulary branding drugs. To save money, they would go to $20 for generic and $30 for formulary.”
He added that “a generic drug costs, on average, less than $10, and a brand drug costs, on average, over $80,” so a better option for both employee and employer would be a plan with a $10 co-pay on generics and a $50 co-pay on a brand-name drug.
“We’re not trying to punish anyone, but we want them to choose an equal and effective generic alternative. Their treatment is not diminished in any way,” he said, and it takes less money out of the employee’s pocket while saving the employer money.
“We all know we have to save employers money, especially in the public sector, but it doesn’t always have to automatically just shift cost to the member,” he said. “We can be creative and build plans that encourage better decisions, better behavior, to reduce cost of health care overall — or at least as much as possible — and approach the level of benefits an employee is used to.”
Spink is a native of Philadelphia and has worked in employee benefits related to health care issues for 20 years.
Associated Mutual is located at 5800 Foremost Drive in southeast Grand Rapids.