In a room filled with 75-plus agricultural producers and insurance representatives, the talk tends to focus on the current insurance crisis facing farmers across the state.
Such was the case Thursday evening at the offices of the Farmward Cooperative in Morgan.
Those in attendance were there to learn about another health insurance option for commodity producers.
Representatives of the newly-formed, but long-planned health-care cooperative called 40 Square were ready, willing and able to present and discuss a new health-care cooperative.
40 Square is a member-owned cooperative formed to assist agricultural producers in working together to help curtail the high cost of health insurance and health care.
Jeff Nielsen, president and CEO of United Farmers Cooperative (UFC), Winthrop, is a driving force in getting the new business off the ground.
“40 Square is a health-care cooperative,” Nielson said. “There is a need for this for farmers in the area. Healthcare is near and dear to your heart. It’s about time we can trust in the health care system. How many of you are good with our health care system today?”
Nielsen knows what he’s talking about when it comes to being a self-insured entity, which is what 40 Square was developed to be. He has been instrumental in keeping the insurance system at UFC as a self-insured system.
It’s working, and Nielsen is passionate about the opportunity being offered to producers of corn, soybeans, milk, meat and other commodities.
He knows there is a need for health insurance reform and believes it will work because “health insurance is the largest concern of the farmers I talk to.”
40 Square is a breath of fresh air for farmers struggling to find health insurance and then having to pay that monthly premium.
“Our rates keep going up,” commented Marge Schroeder, Renville. “Plus living in Renville County, we can’t go where we prefer to go. We cannot go to Mayo in Rochester.”
40 Square does have requirements to become a member-owner.
Members have to produce an agricultural commodity and have at least one common law employee. A common law employee is defined as someone who performs services for a business and that business controls what the person does, and how the person does it. The employer has to instruct the worker on when and where to do the work, what tools to use, where to purchase supplies and also provide the training to successfully complete the job.
Producers must sign up for at least three years.
Producers will purchase stock to become a member of the cooperative. One farm operation would purchase one share and earn one vote under the business structure. Any changes that need to be made will be voted on by the members.
The cooperative will be governed by a board of directors, consisting of ag producers, which would be elected by the voting members.
Because the cooperative is set up as a 308B Corporation, majority ownership must be from the members of the co-op. This means that member owners will control 51 percent or more of the business. The remaining 49 percent can be owned by outside investors.
40 Square members would purchase voting stock up-front for $100, per farm. Common stock, in the amount of $1,000, can also be purchased and can be paid for through the first 12 months of membership. The initial buy-in dollars will be placed into a trust.
“Those funds cannot be taken out of that trust for cooperative services,” Charlene Vrieze, project manager with 40 Square, said.
The trust would be set up to only cover claims placed by members. Business expenses will be covered by outside investors.
Vrieze has also been deeply involved with getting the concept of a health-care cooperative turned into an actuality.
“In Minnesota, we had to pass three pieces of legislation to proceed with our plan for 40 Square,” Vrieze said. “It’s been a long regulatory road.”
Terri Moxley, senior sales specialist with EBSO, explained how EBSO would assist as a third party manager of the business. (EBSO offers assistance “with management of an array of self-funded and fully insured benefit plans and products.”)
“We would make sure the plan is working and how we can change the plan to enhance it,” Moxley said. “The plan becomes tailored to those that are using it.”
Area producers would need to get in touch with their local insurance agents and accountants to pencil out the best option for their operation.
Also in attendance was Bob Skillings, a financial advisor with South Point Federal Credit Union, with an office in New Ulm. He’s excited to jump on board and help farmers decide what will work best for them.
“Hopefully this will be a good solution for farmers,” Skillings said.
Coverage under this new system begins with open enrollment starting Wednesday, Nov. 1, 2017 through Friday, Dec. 15, 2017. Coverage will begin Jan. 1, 2018 for those who chose to participate during open enrollment.