Jvon and Dane Danforth purchased Goody’s Candy Stores Inc. in 2007, but for financial reasons, they hadn’t been able to provide health insurance to their employees.

Last week, the Danforths inked a deal to start offering health insurance to their six full-time employees. Employee premiums will be 100 percent paid for by the Danforths’ company and at a savings of approximately 40 percent compared with plans available on the open market, said Jvon Danforth.

How did they do it?

Through a new health insurance plan announced last week by the Bend Chamber of Commerce in collaboration with Clear One Health Plans Inc. of Bend and Johnson Benefit Planning, a health insurance broker also based in Bend.

First of its kind in Oregon

The plan, in the works for roughly six years, and which also required the personal involvement of U.S. Rep. Greg Walden, R-Hood River, allows the chamber to offer health insurance plans for its roughly 1,300 members and their 27,000 employees.

It’s the first such plan in the state, and potentially could alter how businesses buy health insurance.

“(Health insurance) is really important to us,” said Jvon Danforth. “(It’s) always been a goal since we bought the business to provide it to our employees who work full time, so we’re really excited to be able to realize those savings and are very thankful to the chamber for coming up with this.”

While the nation continues to debate the future of health care, health insurance costs remain the No. 1 issue facing businesses, said Ryan Deckert, the president of the Oregon Business Association in Portland.

Premiums have risen and, more commonly, businesses are asking employees to help with the costs. In Oregon, Deckert said private employees, on average, now pay roughly 28 percent of their premium costs.

In an economic downturn, businesses that offer health insurance to their employees often get squeezed further, said Dave Johnson, of Johnson Benefit Planning.

Employers might lay off younger, less-experienced workers to save labor costs but end up paying more in premiums as the average age of their workers rises, Johnson said. Fewer workers also can mean less purchasing power when it comes to renewing health insurance.

To counteract that, it makes sense for businesses to band together to purchase health insurance. But various state and federal laws prohibit such activity, Johnson said. Only trade associations, which limit membership to specific industries or professions, generally are eligible to offer health insurance plans to their members.

There is a loophole, however. But it’s complex, which is why it took the chamber six years for its plan to come together, said Tim Casey, chamber executive director.

A plan comes together

“About six years ago, we took a look at what health care was starting to cost our businesses, and it was beginning to be one of the biggest issues members were having,” Casey said. “So we started looking into a health care plan for the chamber, and it became apparent that without this special designation, it would have been extremely difficult to work with the state. Basically, it was an easier path for the state to give us approval to be able to offer this to the members.”

It’s called the Multiple Employer Welfare Arrangement, a federal designation that allows beneficiary associations such as chambers of commerce to provide health insurance to their members, as long as they meet several requirements, according to the U.S. Department of Labor.

Associations seeking a MEWA designation “have to pass some stringent requirements,” said Ruth Rogers Bauman, the executive vice president of corporate analytics and government programs for Clear One Health Plans. “The associations have to have some other reason for being other than purchasing insurance, otherwise people come and go and … it’s kind of gaming the system.”

Rogers Bauman said other chambers of commerce in the U.S. have successfully used a MEWA designation to offer health insurance to their members, but this is the first fully insured plan offered in Oregon, she said.

For smaller groups, the time and costs required to get the designation are prohibitive, Johnson said. But the chamber decided to go for it and hired Johnson’s company to help it achieve the MEWA designation.

Johnson Benefit Group employees then began traveling to Washington, D.C., trying to get meetings with the Labor Department, Johnson said. After a few unsuccessful tries, Walden was contacted.

“Walden picked up the ball and got the ball rolling,” Johnson said. “He wrote letters and got his staff to work on our behalf. … They were really instrumental in championing our cause.”

Walden was unavailable for comment Thursday, but his press secretary, Andrew Whelan, confirmed his involvement.

The Oregon Insurance Division, which approves health insurance plans, also confirmed the chamber’s plan and MEWA designation.

Savings

So how much in savings can the chamber’s members expect? Costs are dependent on a number of variables, including number of employees and the average age of the employee work force, Johnson said. But four chamber members have signed up already, and Johnson expects more will follow as the plan gains attention.

The insurance is open to any chamber member with at least two full-time employees. Four different plans are offered, with options for major medical, preventive, maternity, mental health and alternative care, along with prescription drug coverage.

“So far, members have been happy they have an alternative,” Johnson said. “Anytime you come out with something new, there is going to be interest, especially when you are talking about dollars and the impact they can have on an employer. If they can save 10 percent on premiums, maybe that keeps another employee on the books.”

Casey said the chamber plans to sign up for its own plan, and expects it will save 17 percent compared with its old plan.

“We’re looking at this as becoming a very successful program and think this is going to provide some real relief to businesses,” Casey said.

Learn more

For more information about the Chamber of Commerce’s plan, call Johnson Benefit Planning at 541-382-3571.