In any industry, company leaders want team members to put their heads together to develop new ideas, new standards, and best practices. These efforts produce better outcomes and improve a company's health over time.
When companies themselves can mirror this behavior with one another, entire industries can reap similar benefits — that's the value an industry or trade association can bring.
Trade associations can provide members with a chance to learn, network, and formulate best practices and standards that ultimately benefit all involved, including customers. In PIMA's case, for instance, members not only get to share resources and create strong professional networks, but they're also able to provide sponsored benefits to millions of consumers who might not otherwise have coverage.
PIMA members exist to serve their clients. However, government regulation can affect both producers and consumers when it comes to insurance. Collaboration between different companies warrants scrutiny at the state and federal level, and organizations have strict directives to ensure that the benefits to both members and consumers are aligned.
This means taking extra care to ensure that the sponsored benefits that are available to customers also meet all necessary compliance standards.
How Does Government Regulation Affect Consumers and Producers?
Organizations that use a sponsored benefits insurance industry model for coverage have to take on numerous compliance responsibilities. To leverage all the value they can bring, insurance organizations must first make sure they're offering compliant products.
Here's a high-level look at some of the compliance considerations of PIMA members:
- Insurance products require constant vetting and monitoring.
Part of the obligation of staff, in addition to coordinating connections and resources to help members grow professionally, is to work with brokers and partners to ensure the insurance products offered to members are competitive with other market offerings. This monitoring often means that products offered by insurance companies provide some benefits that might not be found in many employer insurance programs.
- Participation in the insurance plan is completely voluntary.
One critical component of a compliant insurance plan is that participation isn't a requirement for members — nor are there any penalties for members who don't participate. It's the organization's job to educate members on which benefits are available, but each member is free to customize his or her own membership experience.
- Insurance organizations leverage the power of the group to find the best coverage.
Companies with insurance programs can capitalize on the strength of their memberships for more clout in coverage negotiations — but that member network must be used to advocate for quality coverage. Responsible use of the bargaining power generated by an organization helps ensure members get the best options in coverage.
- Insurance organizations work with trusted partners.
Organizations can only be as compliant as their partners, which means they would be wise to work with licensed brokers, administrators, and underwriters who have compliance staff. Insurance organizations should also look to partner with stable insurance providers that have proven track records of reliability. As a best practice, seek out PIMA members to partner with through its online membership directory or by looking for the PIMA logo on a potential partner's site.
Compliance scrutiny, while strict, helps ensure that insurance organizations fulfill their missions. When organizations use the sponsored benefits insurance industry model, these principles make up a standard of excellence that ensures members are treated right.
To help facilitate this, PIMA offers resources to help its members remain compliant so they can continue to provide value to customers. PIMA's Legislative & Regulatory Interest Group, for example, hosts webinars to keep members updated on any legislative changes that affect compliance, and it offers other opportunities for insurance organizations to keep up with changes in the regulatory landscape.
Published on July 31, 2020.
To become a PIMA member and participate in its online Legislative & Regulatory Interest Group, click here.