Independence Holding Company, through its subsidiaries, engages in the health, pet and life insurance business.
The company engages in underwriting, administering and/or distributing group and individual specialty benefit products, including disability, supplemental health, pet, and group life insurance through its insurance companies, such as Standard Security Life Insurance Company of New York (Standard Security Life); Madison National Life Insurance Company, Inc. (Madison National Life); and...
Independence Holding Company, through its subsidiaries, engages in the health, pet and life insurance business.
The company engages in underwriting, administering and/or distributing group and individual specialty benefit products, including disability, supplemental health, pet, and group life insurance through its insurance companies, such as Standard Security Life Insurance Company of New York (Standard Security Life); Madison National Life Insurance Company, Inc. (Madison National Life); and Independence American Insurance Company, as well as its marketing and administrative companies, consisting of IHC Specialty Benefits, Inc. (IHCSB); Independence Brokerage Group, Inc. (IBG), My1HR, Inc. (My1HR); and a majority interest in PetPartners, Inc. (PetPartners) (collectively, the ‘IHC Agencies’) and its lead generation company, Torchlight Technology Group LLC (Torchlight). Standard Security Life, Madison National Life, and Independence American Insurance Company are sometimes collectively referred to as the ‘Insurance Group’.
Segments
The company operates through Specialty Health; and Group Disability, Life, New York Short-Term Disability (DBL) and Paid Family Leave Rider (PFL) segments.
Specialty Health segment
This segment consists of the company’s traditional distribution through independent agents and national accounts, and its tech-enabled distribution through its call centers, career advisors, lead generation domains (www.healthinsurance.org, www.medicareresources.org, and www.petplace.com), transactional websites, and its lead generation company, Torchlight. The pet division consists of PetPartners, www.akcpetinsurance.com, www.petplace.com, www.mypetinsurance.com and its independent distribution channels. Independence American Insurance Company takes the risk on the pet insurance and many of the specialty health products sold by these divisions, but its agencies also sell life and health products from other insurance companies for which they earn commissions. The company’s proprietary platforms are designed to support multiple carriers and products.
Standard Security Life focuses on underwriting and selling its DBL and PFL products through general agents primarily to small employers. Madison National Life emphasizes underwriting long-term and short-term disability (‘LTD’ and ‘STD’) and group life primarily to school districts and municipalities in the Upper Midwest through managing general agents and independent brokers; and a growing worksite marketing division. Independence American Insurance Company is the company’s primary specialty health and pet underwriter. In 2020, Independence American Insurance Company began underwriting Medicare Supplement in many states.
The insurance agencies owned by the company are as follows: IHCSB, IBG, My1HR, and a majority interest in PetPartners. IHCSB is the company’s agency that operates through its owned call centers, which has 65 licensed employee sales agents in three locations; its career advisors, which includes 225 licensed agents operating in 7 regions; and its direct-to-consumer transactional websites, www.mypetinsurance.com and www.healthedeals.com.
IBG is the company’s agency that distributes through independent producers in various ways, such as through its regional sales directors who support non-owned general agents and call centers; through national account relationships; and through its 12 sales telebrokerage employees who function as company-owned general agents calling upon independent agents who have a book of business with small employers. My1HR is a technology company that develops quoting and cloud based enrollment platforms for carriers and key distribution partners. My1HR is also a Web Broker, which developed and manages INSX Cloud. This platform enables agents to quote and enroll consumers in Affordable Care Act (ACA) plans, as well as ancillary health products. During the 2020, INSX Cloud was utilized by more than 3,000 independent agents who submitted almost 230,000 enrollments covering approximately 300,000 members, which were predominantly ACA compliant plans and also included specialty health products underwritten by the IHC Carriers, as well as other carriers. PetPartners is a distributor and administrator of pet insurance underwritten by Independence American Insurance Company and an unaffiliated insurer. The company owns a number of web domains and a lead-generation technology company through its subsidiary, IHC Domain Holdings, LLC (Domain Holdings). Domain Holdings owns Healthinsurance.org LLC, which is an on-line marketing company that owns www.healthinsurance.org and www.medicareresources.org, which are lead generation sites for Medicare and individual health and life insurance products. Domain Holdings also owns www.petplace.com, which is a lead generation site for pet insurance that directs those interested in purchasing such insurance to www.petpartners.com. Together these sites produce organic leads for IHCSB’s controlled agency force. IHCSB, Domain Holdings and My1HR together provide the backbone of the company’s insure-tech operations by generating leads, enabling sales of products (both through IHC Carriers and unaffiliated insurers), and enable independent agents to access ACA (and the company’s ancillary) policies through a licensed Web Broker.
The IHC Agencies and IHC Carriers perform underwriting, risk selection and pricing, policy administration and management for the majority of the company’ specialty health business. In addition, the IHC Agencies sell other coverages for multiple insurers, including small group stop-loss, ACA plans and senior products. The IHC Agencies receive commissions and fees for these services and do not bear any of the insurance risk of the companies to which they provide services. While the majority of sales by IHC Carriers have been to individuals and small employers from independent producers, national accounts and affinity relationships, increasingly it has focused on sales from its controlled distribution.
The company focuses on expanding its ‘insuretech’ footprint by generating leads through Domain Holdings; selling through IHCSB’s owned call center, career advisors and transactional sites; and expanding the number of agents using INSX Cloud. Within this segment, the IHC Carriers sell various products, such as senior market products, including Medicare Supplement, Medicare Advantage, dental, vision and hospital indemnity (HIP); ancillary benefits in the under-age-65 market, including dental, vision, short-term medical (STM), supplemental products, including fixed indemnity limited benefit, critical illness, and HIP; pet insurance; and various life insurance and non-insurance Rx and telemedicine services. Several third party administrators, including Ebix Health Administration Exchange, Inc. (EHAE) perform claims and other administrative functions. The company owns a 49% equity interest in Ebix Health Exchange Holdings, LLC, which owns EHAE.
Standard Security Life is domiciled in New York and licensed as an insurance company in all 50 states, the District of Columbia, the Virgin Islands and Puerto Rico. Madison National Life is domiciled in Wisconsin and licensed to sell insurance products in 49 states, the District of Columbia, the Virgin Islands and American Samoa. Independence American Insurance Company is domiciled in Delaware and licensed to sell insurance products in all 50 states and the District of Columbia.
Distribution
Specialty Health
The company distributes its specialty health products in a variety of ways. The company distributes directly to consumers through its call centers, career advisors and www.heathedeals.com. In 2020, the core products sold by these agents were the company’s STM and HIP plans, as well as ACA-compliant offerings. In 2021, the company plans to emphasize the sale of Medicare Advantage plans underwritten by other carriers, and to a lesser extent, Medicare Supplement policies from Independence American Insurance Company and other carriers. Consumers often also purchase ancillary products, including dental, accident, telemedicine and Rx discounts plans, with a core plan. Its career advisors are licensed agents who sell both the company owned and non-company products. Finally, the company sells directly to consumers through www.healthedeals.com. In 2020, Independence American Insurance Company began selling its own Medicare Supplement through its call centers, advisors and select distributors of senior products.
IBG distributes through independent producers in various ways, such as through the company’s regional sales directors who support non-owned general agents; through national account relationships, such as Anthem and United Healthcare as well as single state Blue Cross organizations and regional health plans; and through its 12 sales telebrokerage employees who function as company-owned general agents calling upon independent agents who have a book of business (often property & casualty) with small employers. The lead product for the owned general agency is small group stop-loss underwritten by multiple non-affiliated carriers, although they also sell its individual and group ancillary products. My1HR, through INSX Cloud, was used by over 3,000 agents in 2020 to distribute quote and enroll almost 230,000 ACA and specialty health plans. The My1HR platform, which provides an enrollment tool to employees with little to no effort on the part of the employer, is well-suited for use with health reimbursement accounts. In addition to health insurance, the company’s other products are available on INSX Cloud for purchase, including dental, critical illness and accident plans.
Pet Insurance
The company distributes pet insurance in three ways, such as through PetPartners, where it distributes, administers and underwrites the risk of two brands, PetPartners and AKC Pet Insurance, but will also delegate sales and marketing to unaffiliated companies or affinity groups; through three significant pet administrators where the company only underwrites the risk; and through leads generated by www.petplace.com. The company owns 85% of the equity of PetPartners, which is a pet managing general agent that has an exclusive license agreement to use the American Kennel Club (AKC) brand; and has a proprietary administrative platform. In addition, PetPartners is seeking other internally controlled sales channels, including through employer and affinity groups. In 2019, the company relaunched www.PetPlace.com, which it acquired in 2016, with significantly improved content curated by a board of veterinarians. Average daily visitors to the site is over 30,000, which will improve lead generation from this domain. As of December 31, 2020, the majority of Independence American Insurance Company’s pet business is distributed by three independent pet insurance administrators, such as MetLife, Inc.; Pets Best Insurance Services, LLC; and FIGO Pet Insurance, LLC (FIGO). The company owns a 4.73% equity stake in FIGO.
Disability and Life Products
The company’s disability and life products are primarily distributed by general agents, agents and brokers. The short-term statutory disability benefit product, including the paid family leave benefits, in New York state is marketed primarily through independent general agents who are paid commissions based upon the amount of premiums produced. Madison National Life's disability and group life products are primarily sold in the Upper Midwest to school districts and municipalities through a managing general agent that specializes in these target markets. Independence American Insurance Company also reinsured health products serving the needs of expatriates, third-party nationals and high net-worth local nationals, which is in run out. The Abacus Group LLC specializes in worksite marketing of voluntary benefits and is producing life and disability business for Madison National Life.
Principal Products Underwritten by IHC Carriers
Specialty Health Products
In 2020, this line of business had various categories, such as ancillary benefits, including dental, vision, STM, and supplemental products (including fixed indemnity limited benefit, critical illness and hospital indemnity); pet insurance; and non-subscriber occupational accident.
Ancillary Products
This category primarily consists of dental, vision, STM, and supplemental products (including gap, fixed indemnity limited benefit, critical illness, and hospital indemnity).
The company sells group and individual dental products in most states. The dental portfolio includes indemnity and PPO plans for employer groups of two or more lives and for individuals. Employer plans are offered on both employer paid and voluntary basis. As part of the distribution of its individual dental products, the company also offers vision benefits. Vision plans will offer a flat reimbursement amount for exams and materials.
The company sells STM products in the majority of states. STM is designed specifically for people with temporary needs for health coverage. Typically, STM products are written for a defined duration of at least 30 days and less than twelve months although in 20 states it underwrites STM policies that last up to 36 months. STM products with a duration between twelve and 36 months are referred to as Extend STM products. Among the typical purchasers of STM products are people who are in between open enrollment periods or need coverage for a limited duration until their ACA-compliant plan becomes effective, and others who need insurance for a specified period of time. The company’s STM plans contain many, but not all, of the essential health benefits found in ACA-compliant plans.
The company markets supplemental products to individuals and families. These lines of business are generally used as either a supplement or in lieu of an ACA-compliant plan. The product lines included in this supplemental grouping are hospital indemnity plans, fixed indemnity limited benefit plans, critical illness and bundled packages of accident medical coverage, critical illness and life insurance. These products, which are available in most states, are available through multiple distribution sources, including company owned direct-to-consumer websites, call center and career agents, general agents and on-line agencies.
The company offers gap plans for employer groups, which help employees manage the financial impact of deductibles on their employer-sponsored plans.
Pet Insurance
Independence American Insurance Company has products approved to sell in all 50 states and the District of Columbia. The company uses four distinct forms (policies) to achieve diversity of premium targeting channels focused on purebred puppies (through AKC), shelter/rescue/animal welfare markets, direct to consumer, and affiliate partnerships. In 2021, the company expects to file a first-of-its-kind group pet policy for the worksite market.
PetPartners acquired a mobile app in June 2020, TailTrax, which features a host of features to help pet parents manage the health and welfare of their pet. The app is being provided at no additional charge to policyholders and allows access to policy self-service, including claims submission. The app is also offered on a subscription basis for non-policyholders, featuring 24/7 access to a vet-help line, discounts on pet services and products, including prescription medications, and many of valuable tools.
Occupational Accident
The occupational accident product provides accidental death, accident disability and accident medical benefits for occupational injuries to employees of companies that have elected to not participate in the Texas Worker’s Compensation system (non-subscribers). This program is marketed through two general agents and only focuses on the micro market (under 10 lives).
Group Disability, Life, DBL and PFL
Group Long-Term and Short-Term Disability
Madison National Life develops partnerships with distribution entities to develop targeted niche focused products that result in market dominate insurance solutions in both risk management and product design.
The company’s group life and disability products are offered on both an employer paid and a voluntary basis. They are designed to protect the covered employee’s income when the employee is not able to work due to illness or injury and pay a benefit to the beneficiary(ies) when an employee dies.
Madison National Life is the major writer of k-12 school districts in 8 Midwestern states. The company continues to work with its distribution partner to focus on product differentiation in the niche through product innovation – most recently having launched in 2020, an Active Assailant Rider for school districts. It also continues to develop affinity relationships with large health carriers to provide its disability programs. The product lines included in the worksite offering are fixed indemnity limited benefit plans, critical illness, accident, and life and disability insurance. These products, which are available in most states, are available through multiple distribution relationships.
New York Short-Term Disability and Paid Family Leave
Standard Security Life markets DBL: All companies with more than one employee in New York state are required to provide DBL insurance for their employees. DBL coverage provides temporary cash payments to replace wages lost as a result of disability due to non-occupational injury or illness. The DBL policy provides for payment of 50% of salary to a maximum of $170 per week; a maximum of 26 weeks in a consecutive 52-week period; and benefit commencement on the eighth consecutive day of disability. Policies covering fewer than 50 employees have fixed rates approved by the New York State Department of Financial Services. Policies covering 50 or more employees are individually underwritten.
In 2018, the DBL policy was amended to include PFL. The PFL benefit allows for parent bonding with a newborn or an adopted child, caring for a seriously ill family members and to help military families during times of need.
Group Term Life
The company sells group term life products, including group term life (which includes new term to 120 product), accidental death and dismemberment (AD&D), supplemental life and supplemental AD&D and dependent life.
Individual Life, Annuities and Other
Madison National Life ceased writing individual life and annuity policies in 2015 and the remaining policies in runoff are 100% ceded.
The following lines of Standard Security Life's in-force business are in runoff, such as individual accident and health, individual life (of which a significant portion is 100% ceded), single premium immediate annuities, disability income and miscellaneous insurance business.
Additional Products Sold by IHC Agencies
Senior Products
Medicare Supplement
The IHC Agencies earn commissions and marketing fees from selling Medicare Supplements (also known as Medigap), which is insurance sold by private companies that help pay some of the healthcare costs that Medicare does not cover, including copayments, coinsurance and deductibles. The IHC Agencies sell Medicare Supplements manufactured by the company and a few carefully selected carriers.
Medicare Advantage
The IHC Agencies earn commissions and marketing fees from selling Medicare Advantage (MA), which is a type of HMO, PPO or Special Needs Plans sold by private companies that contract with the federal government through the Centers for Medicare and Medicaid Services, to cover all Medicare Part A and Part B benefits. Many MA plans also include Medicare Part D (prescription drugs), known as MAPD plans, as well as other supplemental benefits, including dental, eyeglasses, transportation and hearing coverage. The IHC Agencies sell MA plans offered by a select few of the major carriers in each market.
Other Products
Small Group Self-Funded
The IHC Agencies earn commissions and marketing fees from non-company carriers for selling employer group and individual insurance products, including self-funded programs for groups of five to 75 employees in 21 states. The self-funded plans are less expensive than ACA qualified group health coverage. In addition to earning commission overrides on group health sales the IHC Agencies use the company’s proprietary quoting and enrollment tools to offer its ancillary plans along with self-funded plans.
Affordable Care Act Plans
The IHC Agencies earn commission overrides by offering ACA plans through 13 ACA carriers in many states. The majority of these customers are enrolled through My1HR, the company’s wholly owned Web Broker, under the INSX Cloud brand. Independent agents can also use INSX Cloud to enroll their customers in ACA plans for which we earn a transaction fee.
Regulation
The company is an insurance holding company; and as such, the company and its subsidiary carriers and administrative companies are subject to regulation and supervision by multiple state insurance regulators, including the New York State Department of Financial Services (Standard Security Life's domestic regulator), the Wisconsin Office of the Commissioner of Insurance (Madison National Life's domestic regulator) and the Office of the Insurance Commissioner of the State of Delaware (Independence American Insurance Company’s domestic regulator).
History
Independence Holding Company, a Delaware corporation, was founded in 1980. The company was incorporated in 1980.
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