AUIC Benefits Association
originally posted: 3/20/2006 revised: 1/14/2012
Q: The summary of plan benefits of my policy contains a paragraph at the beginning that says "Please enroll me as a member of the Association of United Internet Consumers (AUIC)." It also says it costs $2 per month. I do not know what this is, and I do not want to enroll as a member.
A: Many of the most popular health insurance policies available to individuals in the U.S. today are organized as association plans and are only available to members of the association. An applicant typically joins the association when they enroll in the insurance. Some well-known examples are Blue Cross / Blue Shield Associations, AARP (American Association of Retired Persons) and USAA (insurance association for military veterans) and U.S. Chamber of Commerce.
In this case, the AUIC association is specifically formed to offer a good value in this brand of short term health insurance and other health insurance. The cost of the association membership is always built into the premium so most enrollees do not even know that the association exists.
This association practice may seem silly on the surface, but there are some underlying legal and financial reasons for this pervasive practice or organizing health insurance through associations. A benefits association allows more liberal pricing and filing treatment with state insurance departments who must review each new insurance product prior to its offering to the public. Association plans are administered differently (and apparently at a lower cost) than individual insurance policies, according to the insurance companies that offer such policies. Benefits associations also enjoy more favorable federal tax treatment because the Internal Revenue Code allows qualified non-insurance benefits to be provided tax-free to the association members. Of course, this tax advantage is only significant if members actually use the non-insurance benefits that are offered - most do not because the benefits offered in most associations are not exciting to most members.
Of course, you are not required to join any association. However, logically, only members can access the members benefits. So your choice is whether it is wise to spend the $2 per month for AUIC membership in order to gain access to the lower priced health insurance that is only available to association members.
Alternately, you could choose one of the other insurance plans in your state that requires a different group or association membership. See www.FreedomBenefits.net for a complete list of health plans in your state; some may not require association membership. But it appears that all of the viable insurance options in your state are offered through some type of group or association. A complete listing of alternatives can be found on the Freedom Benefits insurance exchange.