Buyer Beware!

Buyer Beware

I’ve often heard that you shouldn’t buy the initial model of any technology product, but rather wait for the second generation to come out, just to let them get all the bugs worked through.  Well, I think that strategy will serve you well if you apply that to the changes that will occur next year in health insurance.  If you are reading my ramblings, you know that I am an insurance agent, and you know that I have opinions on the dramatic changes that are getting ready to slam into the general public January of 2014.  So I thought I might spend a few paragraphs talking about some “new” products that you might see in the very near future.  This post is mostly dedicated to employers, so if you are an individual, not covered by an employer it may not be of interest.  Your time may be better served by checking out our web page by clicking this link: Logan Lavelle Hunt

Employers, you will have the pleasure of seeing many new ideas in the coming months.  The majority of them are going to be designed around avoiding, postponing or shedding altogether the negative effect that Obamacare could have on your business.  Please understand, I do not mean to say that these products lack merit, I am simply advising that most of these products will be “sold” to you rather than “purchased” by you.  So let’s dig in, shall we?

Self-Funded plan designs.  This has long been a strategy for larger employers, traditionally with at least 100 employees, although my personal comfort level for this type of arrangement is more like 250 employees or more.  We have already seen insurance companies who are willing to write these types of plans down to as few as 10 employees.  Because they potentially could:

·         Avoid community rating for premium calculation

·         Avoid most state mandated coverage add ons

·         Avoid rate reviews that fully insured plans must do

·         Avoid the essential health benefit mandate of Obamacare

·         Allow some employer flexibility and data regarding claims

These plans set a monetary cap on what the employer can spend annually on claims for the company.  Fixed costs include purchasing re-insurance, claims administration, network rental as well as agent compensation.  We here at Logan Lavelle Hunt have seen far too many of these plans fail miserably for the smaller employer. If you are looking at this option, call us, we can make sure you have all the facts prior to making that choice.  We can write that coverage for you with a partner that will stand by you if that is your true best option.

PEO’s (Professional Employer Organizations) a firm that provides a service under which an employer can outsource employee management tasks, such as employee benefits, payroll and workers' compensation, recruiting, risk/safety management, and training and development.  This is basically an employee leasing arrangement.  These are evolving in the marketplace, and may or may not be an answer to your problem.  We are still looking into this option as a hedge against the reform laws.  Our initial opinion is to not take the plunge yet…stay tuned, there is more to come.

Logan Lavelle Hunt does have one solution to the Affordable Care Act that does not require the buyer to beware.  That is the Association Health Plan option.  If you qualify to participate in one of these plans, you should get in one as soon as possible.

Association Health Plans.  This is something we know a lot about.   Professional trade associations have been around for many years.  Many associations have had health insurance programs for over 30 years.  The new law does allow for members of trade associations to participate in these health insurance programs if certain conditions are met.  We have several of these available and would welcome any inquiries as to your firms’ eligibility for those programs.  These plans provide the following:

·         Significant savings for member groups who qualify.

·         New Anthem group customers can save on average 8% to 10% over a non-association plan

·         Current Anthem customers can save up to 5% by transferring to the association plan

·         Gain purchasing power by aggregating many small employers into a larger group

·         Stability after the 2014 reforms take effect

With 25 years of successful operations as a fully insured member benefit program, these plans are tried and tested. 

The bottom line for employers is this, you are going to be hit with many options.  Find an agent who has the expertise and the options available to meet your needs.  There are a lot of great agents out there, make sure you pick the one who is not fighting for his or her own interest, because, chances are those interests will not be the same as yours.

Peace.