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Discussion points at VitalOne > No Cadillac RequiredNo Cadillac RequiredOld Lessons for a New Era of Health InsuranceWhat we knew then ... Point A: The point of no insuranceWe can no longer assume that the employed are the insured. According to the National Coalition on Health Care (nchc.org), approximately one-third of U.S. firms do not offer coverage. The outlook gets even bleaker when small businesses are considered. Nearly two-fifths (38 percent) of all workers are employed in smaller businesses, where less than two-thirds of firms now offer health benefits to their employees. It is estimated that 266,000 companies, most with less than 25 employees, dropped their health coverage between 2000 and 2005. It's no secret that health care costs are skyrocketing. So why would 266,000 companies rob their employees of the opportunity to obtain health coverage? They forgot three magic words: No Cadillac Required. Point B: A better placeIf Point A is the point of no coverage, then Point B is a place with a comfortable level of insurance protection. If it doesn't take a Cadillac to get there, what is needed? According to Kyle Roberts, president of Benefit Sphere in Tampa, Fla., a Limited Benefits Plan, which is commonly known now as a Mini Medical, is a pretty reliable vehicle to consider. She said, "The Mini Medical has been a great solution for many of my service industry, retail and school district clients. There is a misconception that employees are only willing to pay two hours of wages per week for benefits. I've found that to be false. In fact, my experience shows that employees are very willing to pay more for robust plans that offer solid value. One of my clients, a large, national restaurant chain, offers both Major and Mini Medical plans and has found that more employees opt for the Mini plan than for the Major plan." Over the past 20 years, Roberts has found that more than 90 percent of those enrolled in Major Medical plans use less than $1,000 of benefits per year. In her experience, well-designed Mini Medicals cover the vast majority of families' primary care needs. Thousands of employers are choosing Mini Medicals as their reliable, no-frills insurance vehicles. In fact, the insurance industry estimates that Mini Medical plans have grown by approximately 20 percent in each of the last three years. It's easy to see why. In addition to their affordability, they are highly accessible, usually accepting everyone within a given age range regardless of preexisting condition, occupation, or residency requirements, with Guaranteed Issue (no medical questions) or Simplified Issue (limited medical questions) underwriting. Also, there are other Mini Medical plans that provide coverage for individuals, families and other non-employer groups with list billing options available. Unlike the traditional Major Medical group plans, some Mini Medical plans may provide greater flexibility by not having minimum employer participation or contribution requirements. However, employers may choose to contribute to increase employee enrollment. There are other benefits to consider when evaluating a Mini Medical plan, such as: So why do many agents still insist on selling the Cadillac?Many producers are reluctant to promote Mini Medical as a viable insurance vehicle. It's understandable considering the rocky history. In the beginning, some plans were poorly designed - either not offering significant premium savings, or, not offering substantial policyholder benefits. Moreover, many who sold plans failed to clearly communicate the policy limitations, creating a wide crevice between policyholder expectations and experiences. Today, the picture is changing. With escalating health care costs and the growing demand for a no-frills insurance vehicle, carriers have stepped up with more robust coverage and better policyholder communication. It's not unusual to find plans that provide coverage for hospitalization, surgery, anesthesia, emergency room treatment, preventative care and maternity for a family premium as low as $81.60 per month - a very affordable alternative to the $700+ price tag demanded by many Major group family plans. And, product understanding has significantly increased too. Agents and employers now have a good understanding of the benefits and the limitations of this low-cost alternative. Essential considerations of plan selection:• Commission structure - some plans offer a level 20 percent for groups regardless of the group size rather than the traditional 3% to 10 percent% range. Make sure clients understand:• The difference between Mini Medical and Major Medical It's not glamorous but it works.Once you've driven or sold the Cadillac, it's tough to go back. But, in reality, companies change, budgets change and needs change. It's apparent that the old Cadillac, Major Medical coverage, no longer fits the bill for a growing number of companies, budgets and needs. Those who succeed are those who adapt. Any insurance agent who provides benefits to an hourly workforce will be well served by getting acquainted with a no-frills, reliable Mini Medical vehicle. No, it's not glamorous. But, yes, it will take your clients and their employees from Point A to Point B. By Liz Kenneally  |
 
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