N.J. one-man shops get insured

BY ROBERT P. MADER
OF CONTRACTOR'S STAFF

TRENTON, N.J. — The New Jersey Plumbing-Heating-Cooling Contractors announced that a change in state insurance regulations now allows one-man shops to buy group medical benefits through the association.

"Over the years, this has been a top issue in New Jersey," said Kevin Tindall, president of New Jersey PHCC. "There has been no source for comprehensive group rate policies for the smaller contractors, who represent a significant part of our membership. This new plan enables one-man shops to qualify for reduced rates like larger contractors receive."

The new member benefit would likely bring new members into the association, added Tindall, Tindall & Ranson Plumbing & Heating, Princeton, N.J., who is also a PHCC-National Association zone director for New York and New Jersey.

New Jersey PHCC members get their insurance through Association Master Trust, a self-funded health plan that provides coverage through Horizon Blue Cross/Blue Shield of New Jersey.

New Jersey PHCC lobbied Association Master Trust to get a rate change through the state department of insurance, Tindall said. The State Department of Banking & Insurance approved coverage of one-man shops and the AMT board of trustees approved the change in early March.

NJ-PHCC is mailing the news to 7,000 active master plumbers registered in the state to let them know about the opportunity for insurance coverage, Tindall said.

Association Master Trust, Springfield, N.J., is not a conventional insurance company, explained Harvey Mishkin, chief operating officer, but rather a self-funded program made up of 13 different associations. Its legal designation is a Multiple Employer Welfare Arrangement, which regulated by the state. The associations, in addition to NJ-PHCC, include groups such as the fuel merchants, lumber dealers, gasoline retailers, the motor truck association and the veterinarians association.

They're not trying to beat the system.

The member associations form subtrusts and elect trustees. One or more of those trustees are elected to the AMT board, which has 17 members. NJPHCC's trustee is Mike Dolan of Jack Dolan & Sons in Somerset, N.J., who is also the president-elect of NJ-PHCC. Dolan and Tindall lobbied AMT for the rate change to get one-man shops approved, Tindall said.

New Jersey League of Master Plumbers also lobbied for the change.

The rate change was possible because state regulators had previously concluded that the federal definition of an employer in the Employee Retirement Income Security Act includes one-man shops. State regulators, in turn, changed their definition to match ERISA's.

NJ-PHCC had to overcome the skepticism of some AMT trustees, Tindall said. The trustees' argument was that young people running their own shops only buy insurance when they're sick. Then they go to the doctor and, if they are sick, they run up big medical bills. If it turns out they're not sick, they drop the coverage.

"What we told them was that our guys aren't trying to beat the system," Tindall said. "They just want to buy insurance for their families."

AMT represents about 1,500 employers, Mishkin said, with 10,500 employees. Total employer contributions last year were $75 million, and the nonprofit trust enjoyed a surplus of $2 million. Medical benefits also include dental coverage. AMT offers a life insurance benefit too, Mishkin said, but that is handled through conventional insurance. The trust has 18 employees and it contracts with Horizon Blue Cross/Blue Shield for stop-loss coverage and claims management.

AMT's current trust document dates from 1978, but the trust was initially created by the fuel merchants association in 1945, Mishkin said.