When Holly Sugar began operations in October of 1925, the factory employees wasted no time in setting up a hospital association for all employees. The organization, known as the Sidney Sugar Factory Employees Hospital Association, paid the medical and hospital bills of its members, in cases of either illness or accidents not covered by Workmen's Compensation.

All workers employed by the Sidney sugar plant belonged to the organization, with each employee contributing a dollar a month membership fees during inter-campaign, and $1.50 per month membership fees during campaign, for as long as the worker remained in the employ of the sugar company. Coverage began after the first 24 hours of employment, and ceased with the last day of work at the factory.

No employee could receive more than $250 in any one year for medical, surgical and hospital treatment.

Association officers took steps to insure that association members could only receive benefits for legitimate illnesses and accidents, not those caused by foolishness or carelessness. Article V, Section 2 of the 1925 contract stated that "Any member of this association who may be disabled by dissipation or immoral conduct or by undue carelessness such as careless driving of automobiles, motorcycles, etc., or riding in such vehicle being carelessly driven, fighting or any hazardous undertaking or exercise shall not be entitled to relief."

Committee members of the Hospital Association could expel members who tried to obtain hospital benefits when not legally entitled to them. However, employees who felt a fellow worker needed extra help could approach the Hospital Association Committee, and the committee would look into any unusual situation. "If necessary," states the 1925 contract, "the committee shall call a mass meeting to determine the right course to pursue through general opinion of all employees."