I thought I'd report on some success I've been having with mini-med for group.
Now look here.... and READ this: I don't sell mini-meds in place of major-med. Read it again. No one should, and I don't believe any ethical agent does. Are we good on that? If not, read it again until we are.
OK.
The problem in CA (not sure if same where you are) is that group health rates are so high now that it is almost prohibitive for the small company(5 to 50 EEs)... and as such a lot of small companies either don't have it... or have had to drop it. And if they do offer it, they find it hard to get 75% participation of eligible EEs... becasue of the cost. Nothing new here, right?
I went to a seminar recently given by this guy (good article... read it.) I've not been a big fan of mini-meds in the past but my mind was changed by this presenter (who is an expert in the field.) The Transamerica plan can be highly customized and I've been presenting it to groups that say they can't afford major-med.
I'm having success with it.
For some companies it "works" as a first step to getting major-med... which they hope to afford later on.
For other firms, this kind of plan works well with low-wage people... restaurants, landscape, office temps, etc. I think you will agree with me that a creditable limited-benefit plan is better than a no-benefit plan! (I wish I hadn't written that because I know I'm going to get lambasted by many here.)
Not much commission in selling these (about 22% of a low premium... like $70 a month or less per EE) unless you do volume (or one really large group... say a 1,000 EEs). But a low-commission sale is better than a no-commission sale... and it puts you in position to bring in major med or DI or maybe individual life later on.
Per usual, YMMV and usual disclaimers apply.
(Before you beat the crap out of me for dare proposing mini-meds, read the paragraph in bold above FIRST! (Some of the old-hands here go postal on the subject of limited benefit plans.))
I personally don't have a problem with you offering Mini-Meds in your market...I live in Maine a Guaranteed Issue state so health conditions do not stop the people I meet from getting help insurance, its the cost of plans.
That being said I think you hit the nail on the head when you mentioned a crediable plan..I think we have all seen some of the cr&p being pushed by some mini-med plans.
I don't sell health and I expect some other poeple will knock me as well for recommending a mini-med for some of the people I run into and I don't even sell it...
I actaully believe my client would be better off with a 10,000 deductible plan do to the stop-loss than a mini-med but so many people belive health care is the doctors visit and prescriptions and think these plans are wonderful, you can talk till your blue in the face about the liability of a major accident and until it happends to them they will ignore you...
That being said some coverage is better than nothing.
I looked it over. Just curious, why would you use this instead of BeneFits by Anthem with 60% participation and pricing in the same area as this mini-med? And a lot more coverage.
BeneFits is HIPAA compliant, state-mandated small group coverage, fully creditable and covered under AB 1672 with GI initial enrollment. Also, under CA law, BeneFits gets the 180 day lookback window when going to another group plan or MRMIP, mini-med does not.
why would you use this instead of BeneFits by Anthem with 60% participation and pricing in the same area as this mini-med?
Here is the cheapest Anthem BeneFits plan I can sell in my zip for a bunch of different ages. BeneFits is priced fine for younger workers... (who should have IFP instead... but that's another story).
And yes, I'd rather sell the BeneFits package... but the mini-med can be customized to get the premium down to where the client or boss can afford it. The plans you see in the link are examples. They can be tweaked.
Also I don't have to worry about participation, eligibility, or employer contribution minimums (as they CAN be offered EE-paid/volunatry.) The TransAm plan can do part-time people as well as those who might work a full-week, but maybe only every other week (staffing agencies, home-health care workers, etc.)
I can also do 1099 people on a bank draft (from what I'm told... I'm not sure what limitations there are.)
These are not age or gender banded and from what I'm told, the yearly increases have been minimal (again, don't hold me to that!)
The worker or boss pays their money and they know up front what they will (and won't) get back. It's SIMPLE! Have you ever tried to explain a PPO co-pay (with an embedded deduct and a separate drug deduct) plan to a green-card landscape worker or college-kid waiter?
Also... I don't have to deal with Anthem!
These are plans for people who make $8 to $15 an hour. These are what I call "better than nothing" plans. If I were 40 years old, I would pay $90 a month if it was my ONLY affordable choice.
This is a whole new market for me... and I don't purport to know EVERYTHING about it... and I've not written one yet... but I'm close with a several outfits that have a wage-earner workforce... and I get a lot of interest when I tell the boss on the phone that he can offer SOMETHING to his 40 year old workers for $90/mo. as opposed to $200... from a reputable company (everyone in my area knows "the Transamerica pyramid" in San Francisco).
If nothing else it gets me into the office, as opposed to hearing "I've seen quotes from other brokers and we just can't afford to offer it... and even if we did, no one could afford to take it." I can tell them (or the HR gal) I have something they probably have not seen before, that it is from a company they know about/respect, and it won't hurt them to take a look. "I can see you Monday at 10 or Tuesday at 11... take your pick."
Hey. Don't believe me. I'm the forum idiot. Try it yourself. What do you have to lose?
HAs anyone heard of the national union fire insurance company when it comes to mini meds or parent company of AIGS. IF you have heard of them any idea of what the commission for agents
Total Group Premium (EE + ER) $855.00(not $1,044.00)
June 1/15 effective date, zip code 95628, same ages, no dependents, 1.00 RAF. These rates hold for July 2009.
That zip code is area 3, not area 2. Area 2 Sacramento is only inclusive of zip code 94571. All other Sacramento zip codes are area 3, which is less expensive.
I ran it as a 1.10 RAF because TTBOMK that is what Anthem would rate a small group of 5 EEs. I've never written the BeneFits package so I could be wrong. Perhaps they give a break for this package.
I didn't quote it using Anthem, but another engine instead... I think it was the one at Rogers. I'll check again.
Make sure they have it in area 3, not area 2. They might have that zip code in the wrong area.
I screwed it up. Here is what I get with the Rogers Benefit Quote:
As I said... BeneFits if fine for low-wage young people but not for those at middle age. If worker is 35 years old working at a local coffee shop making $10/hr or about $1600 a month, her probably takes home about $1400. The rent is $600, leaving $800 for gas, groceries, pay off debt, etc. Is he going to pay $150 a month for health insurance? I know that when I was 30, I wouldn't have. Maybe young people are more responsible now! But if there was a $90 alternative... and the boss would pay $35 of it... that might be more attractive to worker and the boss (especially if he does not have to worry about participation... making sure he hires people who WILL take group or are waived. Also, the coffee guy will probably quit in 8 months... or he will work every other week. TransAm has a system that will handle that... but I forget how it works. (The seminar guy talked about it.)
These plans are not a panacea nor are they the best solution to the health financing mess, but as the guy kept saying to us "It is what it is and it's not what it's not." So far it is about the best the private sector has come up to insure the working poor. If you folks have a better way in CA that will be acceptable to workers and bosses, let me know and I'll pitch that instead.
Note that the above plan has no Rx coverage for name brands. At least the TransAm has a little bit of help for drugs...$25 per script for 12 scripts per year. Not much... but at least something. Same with doc visits etc.
When I tell the boss on the phone that there are no deductibles and that everything is first-dollar, day-one coverage, I can hear their ears perk up. They know their people can't do a $1250 deduct and then 30% until they our OOP of $2500. There is no way to sell that to these workers. From my limited experience they want to pay their money and know in advance that they don't have to pay any more for what the policy covers. And from what I can gather, again from limited experience, is that they understand there is no free lunch and that for this small premium that coverage is limited and that they are going to be on the hook for something major.
Like I say, it is a solution... not the best... but far better than none at all, IMO.
I don't know if I could ethically sell this plan but that's me. Providing someone with 25% of what it costs for a hospital stay still is a BK waiting to happen. However, that is not the basis of your thread.
As far as a door opener, I have no issue. While I'd hate to write the plan, by showing the business owner the relatively small cost difference between a mini-med and a real plan, you might just write some better insurance.
Al, I remember you telling me that your clients looked at value, not price and in fact would rather pay $1,000 a year for a potential benefit of $1,500. (We had our frist of many major arguments on this one). Are you slumming now or simply selling on price not value?
Rick
------------------------------------ ILIAA
Training, Community, Support, and Success Independent Life Insurance Agents Assn rick@iliaa.org
I am not condemning the idea, just trying to understand the full picture.
This is one of the main reasons I only work with non-employee groups. I find owners/officers/partners generally look at different values and 99% of the time will take a good quality HSA-compatible plan.
I have run into quite a few employees recently who are losing large group which cost them zero premium and had 100% coverage for all services. IFP plans are a shock to them. I won't even get into HIPAA plans.
I am also big on class carve-outs when necessary and appropriate (restaurants and such with migratory employees). There are two carriers in CA who will do down to 2 employees class carve-out GI AB 1672.
Al, I remember you telling me that your clients looked at value, not price and in fact would rather pay $1,000 a year for a potential benefit of $1,500. (We had our frist of many major arguments on this one). Are you slumming now or simply selling on price not value?
You bring up a very good and valid point. Two years ago my client base were buying group health on value... and my current upscale life base still does.
But the economy up here is far different (worse) than that in your LA area. We have an official 11% unemployment rate which is probably closer to 15%. The layoffs have been huge here and if the propositions are not passed next week (and I will vote against all but one of them) there will be more layoffs... meaning more and more people will be starting their own businesses (probably all become insurance agents!!)
In answer to your question, I'm just trying to provide products that fit the times. There are a ton of small start-ups here that can't even come close to affording a full major medical group plan... as well as an even larger number of companies are MUST drop their group coverage... or go out of business. I'm just trying to service their needs as best as I can.
Of course these mini plans are not terrific and I agree with you that one auto wreck is a BK waiting to happen. But on the other hand these plans will help the huge percentage of people who do NOT run up large, catastrophic medical bills each year. It will help those people to whom a broken wrist or a strep throat or even a flu shot would be a financial hardship, not to mention a night in the ER with a kidney stone (I've been there a few times myself!)
I think I'm doing the right thing by offering these plans. I gave it a lot of thought and while I agree with you in everything you said, I think it would be ethically wrong for me NOT to offer them... so long as they are offered with full disclosure about what they are and what they are not.
One of the big dilemmas in this biz is do we sell them what they want or sell them what they need? I don't have the answer to that. I hedge by saying I try to sell them on what makes sense for their particular situation at this particular point in time.
Al
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Originally Posted by Dave020
I am also big on class carve-outs when necessary and appropriate (restaurants and such with migratory employees). There are two carriers in CA who will do down to 2 employees class carve-out GI AB 1672.
Yes, cave-outs are a possibility, but they require a lot of documentation and are generally a PITA unless it is a big group.
Anthem requires 5 lives and Shield requires 8 lives and the plan is not GI. Aenta says they won't do them at all:
From Anthem Group Guidelines, page 6
Class carve-outs, such as management only, or salary vs.
Non-salary, may be considered with underwriting approval (minimum five eligible enrolling employees). A list of the job classifications that the employer wants to insure will be required with the initial submission of the group. All employees need to be accounted for, and those in the carved-out classification must be identified. These carve-out groups are subject to underwriting approval, and may be declined if they do not meet Anthem Blue Cross’ underwriting criteria.
=========
Hi Al,
No, we do not offer carve outs as GI for management only. However, since
The minimum amount an ER needs to contribute is 50%, you may find our MC
10,000 deductible plan will fit for this group, it also has rich
Benefits prior to deductible.
Thank you,
Kathy Bixby
Aetna
Account Executive
For Small Groups
========
Hello Al,
Happy Friday : )
Unfortunately for carve outs we would need a minimum of 8 to enroll and it would be considered non GI .
Regards,
Curt
Curt S. Dardano
Senior Regional Sales Executive, Small Group Sales
Blue Shield of California
I did not check KP, and I don't write HealthNet. As I said, the TransAm plan is NOT the ideal, but it is "doable" on a lot of levels.... speed of issue, simplicity of enrollment, and flexibility to add or delete coverages the ER wants or does not want.
Al
Last edited by al3 : 05-17-2009 at 11:28 PM.
Reason: Posts merged
Health Net and Kaiser both write class carve outs down to 2 employees GI. No documentation required except marked DE-6 indicating who is in the carve-out by status on the margin, in pencil if you like. Whomever told you that is full of it! I was writing class carve-puts back in the mid 90's with them for restaurants. No mess, no fuss! Small group carve-out of 11 down to 3, took all of 11 seconds.
As to TransAmerica, ask them how their long-term care market is doing? Oh, that's right, they don't sell LTCi anymore.
Trans is an E&O claim waiting to happen.
Back, way before you were an agent, Trans was the "leader" in LTC insurance. I knew agents at great carriers like NML and MassMutual who sold Trans because they had the best price point. Trans told them they were and would always be the leader in LTCi and that the price points of the "majors' were way too high. When was the last time they sold a long-term care contract? Oh, I forgot, they bailed out of that market.
TransAmerica is the ultimate "cram is deep and sell it cheap" carrier. Anyone who's been licensed more than 10 years knows that!
I miss their LTC product. Great benefits, low prices. Still have a few on the books.
Yes, they inticed many many agents to sell their product. But, as anticipated, price point way too low and benefit way too high. I hate carriers that do that.
Blue Shield did that with "ActiveChoice" quite a few years ago. Low cost plan "with" maternity coverage...oooops! Needless to say that plan way south quickly.
Health Net and Kaiser both write class carve outs down to 2 employees GI.
I will check out both HN and KP and see how their lowest-end plan pencils out for the 35 year old low-wage worker. While I've written KP via KP Choice, I only have a couple of HN plans, which were actually Nationwide Farm Bureau plans that were "assimilated" last summer. I don't write HN because I'm not satisfied with their financials, I don't believe the company is sustainable, and I believe that they will be "assimilated" by Wellpoint or Aetna in the next 12 months.
Trans is an E&O claim waiting to happen.
I think every policy has the potential to be an E&O claim and I'll agree that a mini-med has an increased potential. However I have not read about any such claims and don't know of any agent who has had one made against him/her.
I believe that if you sell it right and enroll it right and have disclaimers and MOUs understood and signed by all parties, that the risk is mitigated... as much as any risk can be mitigated in this business.
If you have documentation of any cases where agents have been sued selling the TransChoice product, of course I'd like to read about those.
TransAmerica is the ultimate "cram is deep and sell it cheap" carrier. Anyone who's been licensed more than 10 years knows that!
You are the first agent I've heard talk badly about the company and its worksite products. I Googled for "dirt" on their worksite products but so far have not come up with much. Perhaps I overlooked something.
My intent here is NOT to convince anyone to sell this plan or any other mini-med. I care nothing about what everyone else does. I just started the thread to say what *I* was doing as part of the general insurance dialectic that is the charter of this board.
When it comes to this... and every other plan out there... mini or major... it is a personal choice and more than ever YMMV.
I will check out both HN and KP and see how their lowest-end plan pencils out for the 35 year old low-wage worker. While I've written KP via KP Choice, I only have a couple of HN plans, which were actually Nationwide Farm Bureau plans that were "assimilated" last summer. I don't write HN because I'm not satisfied with their financials, I don't believe the company is sustainable, and I believe that they will be "assimilated" by Wellpoint or Aetna in the next 12 months.
Health Net is a bit of a question mark. But, a necessary tool in certain group situations. They offer a full line of PPO plans in the portfolio (Kaiser has PPO, but married to CCN network only). Neither is necessarily my first choice, however some groups by nature are really a carve-out from the start. Restaurants and so on are mostly going to be written that way (by class) to obtain participation and limit abuse of the plan. Any business with heavy blue collar employee migration is really a target for carve-out.
When I've done them in the past I simply had to make a notation on the DE-6 indicating class status of each person listed.
Also, I find Health Net a decent fit in other situations with carve-outs because they have cross-border coverage available.
As to TransAmerica, I retract that comment. I was going to remove it last night but Rick already quoted it so I was stuck with it. Never type when you're tired.
It would be interesting to compare this mini med plan with a hospital and surgical group health plan.
There are true group health insurance products out there that are very competitive. What I am seeing on these plans is a reduction in benefits in certain areas. Injectable drugs, therapies, diagnostic services, no brand name drug coverage, no mental health coverage and so on.
In my state I have been able to save clients by putting in place hospital and surgical group plans. I am comfortable selling these plans because I know if someone has a hospital procedure for $40,000 it will get paid. The down side is if they need a MRI they pay for it. The premiums are priced very low. I
Some Success Here with Mini-meds
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