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Employee Health Benefits11/3
I'm in the process of exploring small group health insurance for the first time and finding myself a little frustrated with the process.
I feel like I'm jumping through hoops constantly. Is this normal the first go around, or do I have the wrong broker?
Who are you guy's using and how easy was it to implement?, it doesn't seem like it should be this much of a struggle. Any tips or leads appreciated here.
I used to sell such small group plans (and "large" group meaning 10+) many, many, many years (and about 4 businesses) ago -- as in the mid-70s. Sold this stuff by the truckload to businesses of all types employing 2 up to maybe 1,000 employees.
Including to cabinet shops and many other relatively small manufacturers and employers. Like printers, real estate agents, wholesalers, even an aircraft parts chromium plater who did 747 flap-forks.
It was routine. I could literally walk in your door -- cold -- and if you wanted one of the many plans I offered as a broker, you could sign the application, write a check for the first month's premium, send your employees in to see me for a few minutes each to complete the minimalist enrollment card, and we'd be done in an hour.
These small group plans were all multi-employer group trusts with hundreds or thousands of participating small employers. Minimal underwriting, mainly to make sure that there were real employer-employee relationships and it wasn't some sham concocted just to buy small group health coverage.
As an aside (and this will make everyone a little sick) the generally best plan was one that would have a monthly premium of about $6 for a single male under 30.
Female rate about $7, family rate around $25. Rates for older ages went up of course, but the highest family rate I recall was about $60 for age 60-64. Single male 60-64 was maybe $30.
That got you a $100 per person annual deductible, 80% payment of the next $2,000 and 100% of the unlimited excess. So, no first-dollar coverage, but an annual out-of-pocket maximum of $500. Usual and customary charges covered.
Any group of 2 to 10 could buy this. If you got over 10 I'd have to go shopping for "large" group coverage for you. Much wider market and totally flexible benefit-wise.
I know -- those prices are unbelievable -- but they were real. This back in the days when state governments were just getting into the business of requiring this, that and the other thing (that almost nobody cares about) to be covered. Then the Feds got involved.
I can't comment on today's environment other than to suggest finding an independent broker who can 1) offer you many different plans and 2) doesn't care which one you choose.
Different underwriters and insurers have different requirements -- some more onerous and with many more hoops to jump through than others. Unless you want to spend time with 10 or 20 different agents, find a good broker.
I used to show a prospect a couple of low-cost plans, a middle cost plan and a high end plan. A simple spreadsheet, I typed them individually. With maybe 10 lines of benefit summary and a premium total based on the employee ages/coverage status that I had gotten a week or two ago.
I didn't care what they picked, they were all from good underwriters and whichever carrier was selected was going to pay me. A little more, a little less, didn't matter, what was important was that the client got what he wanted and also understood that was the primary thing -- I was on his side of the fence, not any particular insurance company's.
Of course, most chose one of the low-cost options. As I would have myself and usually recommended if asked.
Econ 101s story is interesting but irrelevant. The particulars of how you provide this are going to be dependent on where you are. So: what state are you in? Are you near a major city? And how many employees are you trying to cover?
And to answer your other questions, it's moderately complex here in PA, and discouragingly expensive.
In the 90's, I grew my business so we could have enough employees (more than 3) to have insurance. We paid for the employee 100%, and 20% of family if they wanted it. The plan was good, I did not have be involved, and the employees thought it was great. They mostly had no claims. Wife and I had two heart caths. I had more heart stuff. The total cost to insurance company for 10 years was less than $200,000.
By the time we were cancelled, we were paying over $3500 per month. Cancelled - why? Because with the coming Crash, we laid off one guy. That made us a too small group, and so they cancelled us. In fact, they reached back 90 days and tried to get out of paying for anything in those 90 days!
We paid in almost $400,000 in 10 years. We hit the insurance companies $150,000 line and they sought to cancel us. Talk about a nice margin! Finally, when I had to let a person go, they cancelled us.
I feel that private insurance is a scam, and should be made illegal. We do not need insurance of any kind. We do need health coverage, and that is easy to do compared to trying to provide insurance for everyone.
I had paid insurance for my employees for awhile. got tired of the continual raise in premiums so canceled and paid the money to the employees to find their own.
I have used a professional employment organization aka PEO since the beginning over 20 years ago. For a very small fee they handle