Associated Industries of the Inland Northwest says it has seen a sharp increase in membership this year following its decision to dump the longtime health-care insurer that served its members in favor of a provider that enabled it to expand its reach statewide and to serve a broader range of employers.


At the beginning of this year, the Spokane-based nonprofit employers group began offering to members a health-insurance plan provided by United Healthcare, ending a 50-year relationship with Premera Blue Cross, says Jim DeWalt, the organizations president. Since then, Associated Industries has picked up about 80 additional companies as members, 70 of which have signed up to have the Spokane group offer their employee health benefit package, DeWalt says.


The shift to a new insurer, he says, has re-energized the nearly 100-year-old association.


We had a decline (in membership) related to a sharp decrease in medical health participation, DeWalt says.


Associated Industries now has 535 member companies. Of those, nearly 250 companies buy employee health coverage through the Spokane groups Associated Employers Trust, which now covers 5,980 people, counting both employees and their dependents, up from 3,510 people at the beginning of the year. At its peak six years ago, the trust was covering 313 member companies and more than 8,000 people.


The trust is expected to collect $20 million in health-care premiums this year from its member employers, up from $14 million in 2007, DeWalt says.


The gains in membership and health-care plan participation are both directly related to Associated Industries decision to switch to UnitedHealthcare, which is a division of Minnetonka, Minn.-based UnitedHealth Group, DeWalt says.


The switch helped Associated Industries expand its membership base in two ways. First, Premera had 60 percent of the insurance market share in Washington, both through direct sales and through its relationship with other associations, limiting Associated Industries opportunity to market the product, says Ted Blotsky, Associated Industries senior vice president. He says the Spokane organization had no ability to compete for established Premera customers. Since UnitedHealthcare is new to the small-business market, it offers a new competitive edge to previously limited choices, he says.


With a company that has only 10 percent of the market it opens up our ability to market the health plans, Blotsky says.


Secondly, UnitedHealthcare provides Associated Industries with plans that can be offered to companies that have five to 99 employees. Premeras plans only could be offered to companies with 50 or fewer employees.


Over time, our needs were different than what could be met by Premera Blue Cross of Washington, DeWalt says.


To continue growing in the future, the association can sell UnitedHealthcare benefits outside of Washington, which it could not do with Premera Blue Cross plans, Blotsky says.


DeWalt says UnitedHealthcare hadnt previously offered health plans to small businesses, and has agreed to limit the number of associations it deals with in the small-business market to three, giving Associated Industries less competition to market plans statewide than it faced when offering Premeras plans.


That, in turn, is helping the employers group to expand its statewide footprint in other ways, by selling its other services to the companies that sign on for the health-care plans. In addition to health plans, Associated Industries offers electronic payroll, training, and other human-resources services. DeWalt says the robust response to the new health offering gives the association greater confidence that it can sell its services statewide.


Blotsky says 50 percent of the new business its now doing through its Associated Employers Trust is from the Interstate 5 corridor in Western Washington. The nonprofit has added two employees in the last year, and expects to hire two more staff members to help it handle the growth and expected increases in other services it offers.


DeWalt says participation in the associations health plans had dwindled in recent years partly because Premeras plans didnt allow Associated Industries to continue to cover member companies when they grew beyond 50 employees.


Seeing UnitedHealthcare enter the market was a welcome addition, he says. Before that, only Premera Blue Cross and Asuris Northwest Health were offering small-group plans to associations, he says.


If you believe in a free market, youd believe thats not a healthy environment, DeWalt says.


New approach


DeWalt says UnitedHealthcares different approach to marketing has helped it regain momentum.


Rather than flooding the state by offering its new product to a number of similar associations, UnitedHealthcare is collaborating with Associated Industries to offer a new product that gives it a competitive boost in the state, with the possibility of future expansion into Idaho, Oregon, and Montanasomething that was not possible with Premera, Blotsky says.


DeWalt says the association is seizing the opportunity to increase its membership and expand its geographical base.


People aware of Associated Industries past, present, and looking forward would say its an aggressive approach, DeWalt says.


He says the Spokane groups newly extended geographical reach is both an expansion and a re-emphasis on its health-care division.


To further those goals, it will administer another trust beginning in June, called the Health Alliance for Technology, created by Wells Fargo Insurance Service, that will sell UnitedHealthcare plans geared to biomedical and biotechnical companies in the Puget Sound area, which typically seek a richer benefit package, Blotsky says.


DeWalt says the companies that are members of Associated Industries on average have between 10 and 15 employees, but the organization also has some larger member companies, such as Central Pre-Mix Concrete Co. and its subsidiaries, which altogether employ more than 1,000 people. Still, Associated Industries focuses mainly on serving the needs of small business, and offers health plans only to members with 5 to 99 employees.


DeWalt points out that the nonprofit itself is a small employer, with 23 workers. It was formed in 1910 as a law firm that helped businesses with collective bargaining. In 1954, it added divisions that offer industrial and commercial safety consulting and health benefits. Now, members can select from an la carte menu of services that include part-time human resource professionals, legal advice, electronic payroll, and training.


Though its membership has increased rapidly since January, the association has been laying the groundwork for anticipated growth for some time, DeWalt says. It is preparing to move into a building it bought last year from Spokane-based Moloney + ONeill Benefits, where Associated Industries will expand its own floor space to 13,000 square feet from the 7,000 square feet it currently occupies in a 14,000 square-foot building it owns at 920 N. Washington.


At the new 20,000-square-foot building, located at 1206 N. Lincoln, Associated Industries likely will lease out the additional space, but hasnt yet decided what it will do with its current building, in which it leases 7,000 square feet of space to the American Cancer Society, DeWalt says.


Looking forward


To take advantage of its membership revitalization and to stay relevant to younger managers at its member companies Associated Industries also is revamping its Web site, DeWalt says.


The redesigned site will, among other things, include video podcasts to deliver training to companies and to brokers who market its services, as well as Internet-based conference calling and even using videos posted on YouTube to disseminate information.


DeWalt says the company needs to stay abreast of technology for more than the cachet of being hip. Though its a nearly 100-year old organization, Associated Industries relies on being technologically current to operate.


Blotsky says 80 percent of Associated Industries business is conducted electronically, including processing applications and enrollments from employers. He says thats also convenient for brokers who sell the associations products.


Its a tool, and we want to fully employ it, DeWalt says.


He adds, It lets us go to our members rather than have them have to come to us, which he says will help Associated Industries expand its footprint further by offering services to companies outside Spokane.


Contact Jeanne Gustafson at (509) 344-1264 or via e-mail at jeanneg@spokanejournal.com.