Is she a scamster or a good samaritan?

[Guest]

Allow me a little cynicism.

I understand where you are coming from. But I don't sleep well at night knowing that I could help someone but kept my mouth shut out of fear that maybe the carrier might make less money or even go out of business.

I put people before carriers, but I fully understand your position so don't take this as me being critical of you. There are always two sides to everything, and in this area I don't think there is a wrong side.

I'm not saying that you or anyone should do what this woman is doing, I'm just wondering if you (all) think she is doing anything illegal or unethical.

You know where I stand.

Al

 

[Sam]

I think that it is a gray area, for someone to do this once in a while, as it is legal. Everyone would have to make their own decisions. However, when you build your entire practice around this concept, and even make extra money off of the mlm side, then I think that it is being dishonest.

If Robin Hood would keep 10% of the money that he stole from Prince John, as his fair wages for helping people out, then I think more people would consider him a thief, than a hero.

Charity is terrific, but less so when it comes at someones expense. Most likely, the extra cost gets paid by other small businesses, as opposed to the evil corporation.

 

[STIBROKER]

I have done 2 man groups in the past but in every case the company was already in place...now I do have a client that this is a possibility..... to set this up I told him what I need to write a 2 man .....but making this a main business practice can get you black listed by your carriers.....

 

[Guest]

I think that it is a gray area, for someone to do this once in a while, as it is legal.

If it is legal 'once in a while' why is it not legal or not honest all the time?

when you build your entire practice around this concept, and even make extra money off of the mlm side, then I think that it is being dishonest.

Dishonest to whom? The carrier? You said above it is legal? I know carriers might think otherwise and pull your ticket, but what would "your god" say? When I get to meet my maker, I don't think he's going to ask "So Al, how much money did you make for the carriers" as opposed to "So Al, tell me how many people you were able to help get insurance when no one else was there for them?"

If Robin Hood would keep 10% of the money that he stole from Prince John,

I think it was King John... the only "John" to ever rule... he was so terrible no other king would assume that name again!

Most likely, the extra cost gets paid by other small businesses, as opposed to the evil corporation.

What is the difference if two women read this list and say to each other "Let's go into business and then we can get insurance and maybe make some money... but at least we will be covered under AB1672 [GI issue for small biz.]" as opposed to someone asking "Sam, if I start a business, can/will you write me group insurance?"

It all comes down to personal priorities. Do you serve the carrier or the client? It's hard to serve two masters. This woman I met has answered it for herself. What would you do if someone came to you and said "I'm starting a biz so I can get insurance." What would you do?

I'd say "TTBOMK, it is not legal to start a business JUST to get insurance. While I'm not a lawyer and don't give advice, TTBOMK it is legal to start a business AND get insurance. Tell me again what you are doing?"

Is that not ethical? Maybe. But I'm in the biz to help people and I'm willing to skate close to the edge of the 'legal' pond and hope I don't fall through the ice! YMMV.


Al

 

[Sam]

If it is legal 'once in a while' why is it not legal or not honest all the time?

Legal and honest are not the same thing. It may well be legal to do all the time, and it may even be honest, but I think that making it a practice is unethical.

Dishonest to whom? The carrier? You said above it is legal? I know carriers might think otherwise and pull your ticket, but what would "your god" say? When I get to meet my maker, I don't think he's going to ask "So Al, how much money did you make for the carriers" as opposed to "So Al, tell me how many people you were able to help get insurance when no one else was there for them?"

My point is that if you claim to be helping everyone, and you are performing such kindness, and in reality, you are making a lot of money off of it, then your claims are dishonest.

The god point is silly, I don't think he will ask how many books you published either. If you want to give charity, or actually devote yourself to altruism, then that is very commendable, but if you enrich yourself while doing so, the I question your motivations, and so will your god.

I think it was King John... the only "John" to ever rule... he was so terrible no other king would assume that name again!

http://en.wikipedia.org/wiki/Robin_hood "In some tales the antagonist is Prince John (based on the historical John of England"

 

[somarco]

Carriers that write small group understand they are going to take it in the shorts. The only folks that buy small group plans, particularly 2 - 3 life plans, are those who are uninsurable.

My only question is, how are they getting by the payroll issue? All of my carriers require payroll forms to verify there are 2 full time, W2 employees. If mom & pop are not making at least $200/week (each) from the business & paying taxes, this is a house of cards that will fall and fall hard.

I can write all kinds of folks with sideline businesses (including yard sales) as long as they have the payroll records.

That's usually where it falls apart.

If they have an MLM that is generating enough to pay $400/week ($200 for mom and another $200 for pop) plus cover the payroll taxes and health insurance, then perhaps I need to find out what they are doing.

Most MLM'rs make less than $500 per year. . . despite what they would have you believe.

 

[senior-advisor-indiana]

This lady must be pretty good looking, or a good sales person. Al seems to think she is god and that insurance is the devil now.

 

[STIBROKER]

Carriers that write small group understand they are going to take it in the shorts. The only folks that buy small group plans, particularly 2 - 3 life plans, are those who are uninsurable.

not necessarily....2 of the 2 mans I have done in the past was to cover maternity..(one was preg. and one wanted to get preg)...after the kid was born in both cases the plans are still in place 3 to 5 years later......one had 2 kids in 3 years and has grown to a 5 man group......the other just likes the rich benies and is a self~emp home builder.....

 

[Guest]

I can write all kinds of folks with sideline businesses (including yard sales) as long as they have the payroll records.

That's usually where it falls apart.

If they have an MLM that is generating enough to pay $400/week ($200 for mom and another $200 for pop) plus cover the payroll taxes and health insurance, then perhaps I need to find out what they are doing.

Most MLM'rs make less than $500 per year. . . despite what they would have you believe.

Well, TTBOMK the carriers don't care if a business makes money or not. Lots and lots of start-ups lose money for years and years. But if payroll is being paid out of initial capitalization, (as is usually the case) I don't see a problem. And any half-way decent payroll service will generate all the reports necessary (and of course file the taxes with the various jurisdictions.)

I can see how setting people in business in her own MLM downside is a conflict, but if she counsels them to start a pet-sitting biz or something similar, something she has no interest in, I see no crime in that.

We can argue the details until the moon turns blue. What I'm interested in is the marco level. Is this agent a 'crook' (a la Nixon!). Is she doing wrong?

Al

 

[Dave020]

My only question is, how are they getting by the payroll issue? All of my carriers require payroll forms to verify there are 2 full time, W2 employees. If mom & pop are not making at least $200/week (each) from the business & paying taxes, this is a house of cards that will fall and fall hard.

Generally the businesses are set up corp or partnership with both spouses in the capacity of partners or corp officers. One form for that with supporting documentation. No need for DE-6 (wage tax report), payroll or anything else (in California). Now many carriers will requires spousal groups to submit draw receipts, banking records and other information in an effort to discourage them (Al's favorite dark colored carrier is one of them). The other dark colored carrier couldn't care less as long as the group is qualifying. Kaiser and Western Health will even do Sole Props as long as both spouses are on the tax returns. Key is knowing how the carriers operate on very small and spousal groups. Income is not a requirement in California, just weather the carrier wants to make it an issue or not. They do need to be actively engaged in the business.

Dishonest to whom? The carrier? You said above it is legal? I know carriers might think otherwise and pull your ticket

Actually, I believe it may be a DOI violation to engage in this activity where income can be derived from client source outside of the insurance commission. It seems in the dim recesses of my memory that licensing requirements prohibit earning commissions on insurance sales with those we are engaged with in another business.

Dave
www.davefluker.com