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Land O’Lakes Teams up with Gravie on Health Insurance

While the rest of the country grapples with the politics surrounding affordable healthcare, farmers who are part of the Land O’ Lakes co-op are feeling much better, thanks to an affordable, comprehensive health plan that replaced their previous more costly and inconvenient plan many scrapped together on their own. Or in some cases, they finally got health coverage.

While the plan is not new, it is newsworthy because it shows how the commonality of geography and interests can create a pool that lowers healthcare costs for self-employed producers. There are options through health insurance exchanges to help families and small businesses shop for and enroll in programs for medical insurance. But a downside for people living in rural communities is the limited access to convenient medical providers, plus some plans don’t cover the family’s physician of choice, or even a close-by clinic. 

The co-op started receiving numerous member requests for a better solution to healthcare, says Pam Grove, senior director of benefits for Land O’ Lakes. Some members were saddled with 30 to 40 percent annual increases in their plans, she says. And one farmer told her that he and his wife previously were paying a high premium, a high deductible and driving two hours each way for every doctor’s appointment. 

And they were the fortunate ones who could afford to be insured at all. Many farmers took the risk of doing a physically demanding job without having insurance. 

While everyone admits farmers are vital to our economy and a healthy food supply, in 2018 Minnesota farmers earned on average $26,055—which is less than half the average American’s income—the lowest in the last 23 years it’s been tracked, according to a report by the University of Minnesota Extension. (The study represents about 10 percent of Minnesota’s commercial farmers; the U.S. Census Bureau reports that the average American makes about $56,000 a year.)

The Land O’ Lakes Cooperative Farmer Member Health Plan is a good example of how smaller employers can band together to purchase group insurance as if they were a larger employer. That ability to purchase as a group is because of the passage of the Association Health Plan regulations. Land O’ Lakes’ plan started with 18 co-ops and now has enrolled 12,000-plus people, Grove says. Annual increases have been around 2 to 7 percent, which is significantly better than the previous 30 to 40 percent increases, she adds. 

Land ‘O Lakes partnered with Gravie, a Minneapolis-based benefits marketplace, to roll out the program to co-ops and their employees. Marek Ciolko, Gravie co-founder and COO, says Gravie also runs the back office duties of the plan, including processing  the medical claims, and provides on-phone care and instructions. 

“Minnesota is on the leading edge of this movement,” Ciolko says. In 2019, when the federal regulations on co-op insurance kicked in, they were able to reach out to the co-op’s farmers in Nebraska.

The feedback he receives, he says, has been largely positive, but mostly “we hear about savings,” he says. For instance, one farmer’s premiums that were $2,400 a month were lowered to $1,600 after joining the plan. “I don’t know if that level of savings was across the board,” he admits, but he does know that the new plan offered a wider net of available health providers. 

“Farmers have enough to worry about right now,” Grove says. Being able to provide them with both convenient and truly affordable care is just one of the values of  being part of a co-op. 

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