Med supp replacement question

[Winter_123]

I am trying to sharpen my understanding a little about how dollars are credited when a client replaces a med supp and cancels the current one.

First, are there safeguards as with MA's to prevent clients from enrolling in more than one med supp (perhaps inadvertently by not cancelling the other one). In my limited sale of supps (so far, hoping to do more) I assume not and emphasize to clients the need to take affirmative action to cancel the previous one when they have confirmed acceptance into the new plan. This is required rather than just a safeguard right? No one is going to notice at the fed or carrier level that they are double enrolled right?

Second, can clients just dis-enroll with most carriers via a phone call or are there some carriers that require paperwork or some other hoops to jump through.

Third, clients are obviously concerned about double paying for a month. Suppose they get their new policy mid-month and are paid up for that month through an automatic withdrawal at the beginning of that month. Should they expect to be have their account credited for the two weeks after they cancelled? (how does that work, they just adjust their account or they close it out and send a paper check?)
Or, is all of this subject to variation from carrier to carrier. In other words, can one carrier credit back and another take the position that if they do not give back partial credits for the monthn once the month has been paid up.

Thanks for any comments/guidance here.

Winter

 

[Dave020]

I am trying to sharpen my understanding a little about how dollars are credited when a client replaces a med supp and cancels the current one.

First, are there safeguards as with MA's to prevent clients from enrolling in more than one med supp (perhaps inadvertently by not cancelling the other one). In my limited sale of supps (so far, hoping to do more) I assume not and emphasize to clients the need to take affirmative action to cancel the previous one when they have confirmed acceptance into the new plan. This is required rather than just a safeguard right? No one is going to notice at the fed or carrier level that they are double enrolled right?

The applications I have seen for supps have several questions about existing supp or MA coverage and require the applicant to state if and when they will terminate the other plan (or have terminated). It should be covered pretty thoroughly in the new application

Second, can clients just dis-enroll with most carriers via a phone call or are there some carriers that require paperwork or some other hoops to jump through.

It probably depends on carrier, but most I have worked with would require a written signed request from the subscriber indicating desire to drop the plan and effective date of the drop.

Third, clients are obviously concerned about double paying for a month. Suppose they get their new policy mid-month and are paid up for that month through an automatic withdrawal at the beginning of that month. Should they expect to be have their account credited for the two weeks after they cancelled? (how does that work, they just adjust their account or they close it out and send a paper check?)
Or, is all of this subject to variation from carrier to carrier. In other words, can one carrier credit back and another take the position that if they do not give back partial credits for the monthn once the month has been paid up.

I would assume like most health contracts, it would be month-to-month and no partial refunds for partial months.

 

[sman]

I am trying to sharpen my understanding a little about how dollars are credited when a client replaces a med supp and cancels the current one.

First, are there safeguards as with MA's to prevent clients from enrolling in more than one med supp (perhaps inadvertently by not cancelling the other one). In my limited sale of supps (so far, hoping to do more) I assume not and emphasize to clients the need to take affirmative action to cancel the previous one when they have confirmed acceptance into the new plan. This is required rather than just a safeguard right? No one is going to notice at the fed or carrier level that they are double enrolled right?

Second, can clients just dis-enroll with most carriers via a phone call or are there some carriers that require paperwork or some other hoops to jump through.

Third, clients are obviously concerned about double paying for a month. Suppose they get their new policy mid-month and are paid up for that month through an automatic withdrawal at the beginning of that month. Should they expect to be have their account credited for the two weeks after they cancelled? (how does that work, they just adjust their account or they close it out and send a paper check?)
Or, is all of this subject to variation from carrier to carrier. In other words, can one carrier credit back and another take the position that if they do not give back partial credits for the monthn once the month has been paid up.

Thanks for any comments/guidance here.

Winter

Winter,

When replacing a Med Supp your client still has to contact the carrier. Dave mentioned requiring something in writing from the client to the carrier to facilitate this. It's been my experience, once the new plan is approved, you can have the client contact the old carrier and request that they stop the bank draft due to them replacing their coverage. Non payment of premium will be sufficient.

As for the coverage becoming effective while the old coverage is still in place, simply request an effective date on the new coverage to begin as the other ends. For example, someone has just paid their October premium for their existing Med Supp and you are going to replace that plan with a new one, request an effective date of 11/01/08 with the new plan.

 

[Frank Stastny]

First, are there safeguards as with MA's to prevent clients from enrolling in more than one med supp (perhaps inadvertently by not cancelling the other one).

No there isn't.

In my limited sale of supps (so far, hoping to do more) I assume not and emphasize to clients the need to take affirmative action to cancel the previous one when they have confirmed acceptance into the new plan.

That is correct. It is the new clients responsibility to cancel the policy.

This is required rather than just a safeguard right? No one is going to notice at the fed or carrier level that they are double enrolled right?

Also correct. It is illegal for a senior to have more than one Med Supp policy. However, it is legal for a senior to keep their company group insurance and take a Med Supp policy. It is highly unlikely that anyone will check with the client and ask them how many Med Supps they have unless the client tells the dept of insurance.

Second, can clients just dis-enroll with most carriers via a phone call or are there some carriers that require paperwork or some other hoops to jump through.

There are a number of different ways a senior can dis-enroll with the carrier of their Med Supp policy.

They can simply go to their bank and stop the automatic bank draft, they can call the company and request their policy be canceled but they will most likely have to send a letter. The worst way to tell them to cancel is by calling the agent who wrote the policy. I would recommend to them that they not do that for obvious reasons.

I tell my new clients to cancel their bank draft. Calling the company usually results in them drafting an extra month. Then your client has to request a refund that will take six to eight weeks for them to receive.

Third, clients are obviously concerned about double paying for a month. Suppose they get their new policy mid-month and are paid up for that month through an automatic withdrawal at the beginning of that month. Should they expect to be have their account credited for the two weeks after they cancelled?

Med Supp companies will not refund any part of a month. As Sman stated, you control that by setting the effective date of the new policy. If I were to write a policy today on the 2nd, I would most likely make it effective December 1.

Most Med Supp companies will get the policy to the client in about three weeks. I like to set the effective date far enough in advance so my new client has the policy in their hands before they stop the bank draft on the old one.

If you ever find that either you or your client, for what ever reason, wants the new policy to start later than the effective date you put on the application you can simply call the company and ask that they advance the effective date. At least I can with my carriers.

You can also call, or at least I can, and request that the policy go into effect sooner than the effective date on the app.

With the companies I represent, if the client insists that they want the policy to go into effect on the first of the next month and it is say the 25th of the current month, I could put a November 1 effective date even though the app may not even get to the company until after November 1.

Med Supp companies are pretty easy to deal with.

You can give me a call anytime. I always have time to talk to insurance agents.
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Winter,

When replacing a Med Supp your client still has to contact the carrier. Dave mentioned requiring something in writing from the client to the carrier to facilitate this. It's been my experience, once the new plan is approved, you can have the client contact the old carrier and request that they stop the bank draft due to them replacing their coverage. Non payment of premium will be sufficient.

As for the coverage becoming effective while the old coverage is still in place, simply request an effective date on the new coverage to begin as the other ends. For example, someone has just paid their October premium for their existing Med Supp and you are going to replace that plan with a new one, request an effective date of 11/01/08 with the new plan.

When replacing a Med Supp there is nothing that says your new client has to contact the other carrier. However, you must send in a replacement form along with the app to the new carrier.

Having my new client go to the bank and stop their auto bank draft is what I tell all my new clients to do. I tell them that their old company will send them bills and letters and to throw them away.

As I said earlier, if your new client calls their current carrier and requests that the bank draft be stopped say December 1 I have had several instances where they told my client they would and then drafted the December payment anyway. I have learned to tell them just to go to the bank. It makes my life and theirs a lot simpler.

If the client says they don't want to pay the fee to stop it I ask them if they would rather pay the $20 or have the company claim that they couldn't process the request quickly enough and December got drafted anyway. That's when I tell them that it will probably take at least eight weeks to get their refund check. They usually go to the bank.

 

[GreenSky]

The bottom line is a med supp is no different than an IFP. There are protections for the senior making it illegal for an agent to sell dupicate plans. (I get around this and double my income by submitting both an original and copy to the company).

Rick

 

[Dave020]

The bottom line is a med supp is no different than an IFP. There are protections for the senior making it illegal for an agent to sell dupicate plans. (I get around this and double my income by submitting both an original and copy to the company).

Rick

I KNEW you had an angle

So am I still uninvited to you elitist little SoCal agents group lunch thingy?? I know, a cental coaster might taint the affair LOL

 

[sman]

When replacing a Med Supp there is nothing that says your new client has to contact the other carrier. However, you must send in a replacement form along with the app to the new carrier.

Having my new client go to the bank and stop their auto bank draft is what I tell all my new clients to do. I tell them that their old company will send them bills and letters and to throw them away.

As I said earlier, if your new client calls their current carrier and requests that the bank draft be stopped say December 1 I have had several instances where they told my client they would and then drafted the December payment anyway. I have learned to tell them just to go to the bank. It makes my life and theirs a lot simpler.

If the client says they don't want to pay the fee to stop it I ask them if they would rather pay the $20 or have the company claim that they couldn't process the request quickly enough and December got drafted anyway. That's when I tell them that it will probably take at least eight weeks to get their refund check. They usually go to the bank.

Frank,

I never said they HAD to contact the carrier. I recommend this for the very reason you stated (so they don't have to pay their bank a fee). I always recommend they write down the date, time and name of the person they speak with when they cancel their draft. This way they can hold someone responsible if there were a mistake. I know I'm not the veteran you are, but I can honestly say that I have never had a client (Med Supp, Life Insurance, Mutual Fund systematic investor, etc) who has ever had the carrier or mutual fund company not honor their request in a timely fashion.

 

[GreenSky]

I KNEW you had an angle

So am I still uninvited to you elitist little SoCal agents group lunch thingy?? I know, a cental coaster might taint the affair LOL

Okay, you're invited. But not the Irish!

Rick

 

[Frank Stastny]

Frank,

I never said they HAD to contact the carrier. I recommend this for the very reason you stated (so they don't have to pay their bank a fee). I always recommend they write down the date, time and name of the person they speak with when they cancel their draft. This way they can hold someone responsible if there were a mistake. I know I'm not the veteran you are, but I can honestly say that I have never had a client (Med Supp, Life Insurance, Mutual Fund systematic investor, etc) who has ever had the carrier or mutual fund company not honor their request in a timely fashion.

The following is the only reference I made to you in my post. "Med Supp companies will not refund any part of a month. As Sman stated, you control that by setting the effective date of the new policy. If I were to write a policy today on the 2nd, I would most likely make it effective December 1. That has nothing to do with contacting the carrier. Where do you think that I said that you said that they HAD to contact the carrier?

I was agreeing with your statement. Having a bad day today? It happens to me too.

I have had it happen numerous times where the policy didn't get canceled on the date requested and an additional month was drafted. For example, if I write a policy on say the 28th of the month and the client insists it go into effect on the 1st of the next month the bank draft may not get canceled by the carrier.

It never has been a hassle to get the company to issue the refund to the client if they initially called in a timely fashion, just takes a long time.

The fact that you haven't had that happen is great. I might be the only agent in the free world that has experienced that.

Maybe I have had it happen simply because I have been doing this for 15 years. When it does happen my new client calls me and initially expects me to take care of it and doesn't understand why I can't handle it for them.

I try to make things as simple and uncomplicated as possible for both my client and me.

 

[Newby]

I have always had the effective date on the 1st or 15th. I estimate around 3-weeks to get it approved. If it runs over I just change the effective date to the next 1st or 15th.

Once the policy is issued, I meet again with the client and we call the old insurance company on my cell phone (with speaker on). I tell them I am an insurance agent in Indiana and I am her with Joe Smith who has just bought a new med sup from another company. We need to cancel the old one as of XX/15/2008 (usually at least 5-days in the future.) They verify with the client and confirm the cancelation.

They do refund half months in my experience. Sometimes they request a written cancelation which I always have with me and just get the client to sign and mail it in for them. If they seem uncooperative (Bankers Life) I mail it certified.