Hundreds of independent financial advisers who signed up for a business group’s new health insurance program this year will be stuck looking for new insurers in 2022.
About 900 advisers out of more than 30,000 members of the Financial Services Institute have purchased health insurance that the organization noted Would provide them with coverage for “themselves, their licensed staff and their families at a fraction of the cost of open market plans.” The Washington, DC-based independent brokerage advocacy group announced this week that they will instead have to come up with new plans next year.
“While we have done our due diligence, including bringing in a well-respected international law firm to review the plan documents, and have received specific assurances from the health program carrier, we now have reason to believe the program is not fully compliant with all regulatory requirements, ”CEO Dale Brown said in an October 26 email. “As a result, we have terminated our relationship with the health program carrier for cause and we no longer endorse or support the program.”
Brown said the organization’s goal now is to help enrollees maintain health coverage in 2022, and he promised to send an update as soon as it becomes available. Advisors who joined the program after its launch by the ISF in April will receive one year of free membership in the organization.
“In the meantime, we encourage you to explore other coverage options that may be available to you,” Brown added. “We do not approve of continued participation in the 2021 program beyond this calendar year.”
Representatives of the ISF declined to comment further.
The organization was committed to ensuring that counselors, staff and their families could receive coverage at savings of up to 50% of open market rates. When the program started, the FSI described the insurance as National Preferred Provider Organization (PPO) plans available in all 50 states and compliant with the Affordable Care Act, also known as Obamacare. The program offered three-level deductible plans of $ 2,500, $ 5,000 and $ 10,000 with maximum amounts at the same rates.
“The beauty of the independent model is the freedom it gives advisors to open their own businesses and run it as they see fit,” said Chris Paulitz, head of strategic initiatives at ISP, in a statement at the time. . “Yet health care premiums higher than their mortgages can restrict their ability to reach their full potential. Our health insurance plans level the playing field for financial advisors and they no longer have to shoulder the burden on their own.
ISF board member Scott Spiker, chairman of military and veterans firm First Command Financial Services, released another statement this spring describing the plans as “exactly what our industry had. need for a long time “.
“Advisors should seriously consider this plan and change now,” Spiker said. “I urge my advisers to do this and I urge all advisers to do the same. “
It is not immediately clear which aspects of the plans did not comply with health insurance guidelines under ACA, ERISA and other relevant laws. According to Carolyn McClanahan, financial advisor, physician and policy expert, the ISP program was a self-insured group plan that went through the process where insurers decide the price and level of coverage based on what they know about the condition of participant’s health.
“Self-funded plans can get away with a lot. They had medical underwriting and they could let people down – so it wasn’t good insurance to start with, ”McClanahan, the founder of Jacksonville, Fla.-Based Life Planning Partners, said in an email. “What sounds too good to be true probably is.”