Is she a scamster or a good samaritan?

[somarco]

plausible deniability that the company was not started to obtain insurance. By establishing the company for the sole purpose of obtaining group coverage she is clearly in violation of most insurance companies underwriting guidelines. Abuse such as this is why many states have lost thier ability to write association plans.

Thats a bit of a stretch.

I have quite a few clients who have added a spouse to the payroll in order to obtain group insurance. I have others who have formed companies in order to have an outlet (other than COBRA) for health insurance for themselves and their family.

Nothing wrong with any of that.

The carriers set the rules. They require documentation (usually a business license and of course payroll records) and away we go.

If the underwriters are going to become clairvoyant in an attempt to divine the reason behind forming the company, or adding family members to the payroll, then that is a stretch.

Its like asking the police to arrest someone because you think they are going to commit a crime.

Wont happen.

I see nothing wrong with helping clients to create a sideline business as a way to write group insurance.

What I keep asking, and no one has yet answered, is how is this MLM business going to generate enough PAYROLL to satisfy the group carrier. If you can show me an MLM that you will help me build to $200/week+ in income within a few months ($400 including my wife so we can have a 2 person group) then I'm in.

Otherwise this entire thread and concept is worthless.

 

[James]

What I keep asking, and no one has yet answered, is how is this MLM business going to generate enough PAYROLL to satisfy the group carrier. If you can show me an MLM that you will help me build to $200/week+ in income within a few months ($400 including my wife so we can have a 2 person group) then I'm in.

Otherwise this entire thread and concept is worthless.

It was stated that the company would likely be in the negative cash flow. IMHO it wouldn't be hard to place money in the company only to pay payroll. Money goes in one funnel comes out another, for only a certain time period to satisfy underwriters. Now would they catch that, depends upon how you do it I suppose.

 

[somarco]

the company would likely be in the negative cash flow

My company (agency) was in negative cash flow for most of the first year when I was marketing stop loss thru TPA's. It took me 3 months to get my first account and another 2 to get my first commission check.

Expenses (other than payroll, which there was none) were paid via a personal loan from me to my company creating a loss. Payroll didn't kick in until the 10th month. By the 15th month the agency was kicking butt.

That business has a long gestation period. Sometimes it takes 90 days or more to get a decision, then another 30+ to get everything in and approved. Most folks lack the capital & patience to work that way but I knew what the payoff would be.

Yes, you can make a loan to the company to generate a payroll but most of the folks I run in to who are looking for health insurance, and group is the only outlet, dont have the personal cash flow to start a business, loan it $1600 per month for payroll (plus taxes) and pay another $600+ per month in group health premiums.

Carriers usually check payroll records once. If it is a new company they will check them at the end of the first quarter after the group is in place and maybe a second time. Beyond that they have better things to do than continuously asking for payroll records to prove there are 2 folks on the payroll.

I personally think this thing of building an MLM downline just to write a group health policy is a sham and takes too much effort. It is much easier to find legitimate players with the cash to buy than to chase after some makeshift MLM business just so you can pick up a $40/month commission on a 2 life group.

 

[Crabcake Johnny]

Well said.

 

[Winter_123]

I personally think this thing of building an MLM downline just to write a group health policy is a sham and takes too much effort. It is much easier to find legitimate players with the cash to buy than to chase after some makeshift MLM business just so you can pick up a $40/month commission on a 2 life group.[/quote]
==============================================

This discussion opens the possibility of adding a whole new dimension to the sale of Girl Scout cookies. Think about.

Winter

 

[LaffAgent]

This discussion opens the possibility of adding a whole new dimension to the sale of Girl Scout cookies. Think about.

I like the way you're thinking

 

[Sam]

Some 2 life groups pay $150 a month in commission.

 

[SME]

First a disclaimer my group experience is limited to New Mexico and is GI. That said I have written more than a few start up companies and generally the carrier asks for articles of incorporation and a signed affidavit from the owner that the covered employees work a minimum of 30 hours a week for the company. If these MLM businesses are for a husband and wife then the carriers just need to see the articles of incorporation listing both participants as owners or directors. The only carrier that has ever come back and asked for a wage report or payroll records is BCBS. Most of them write the business and walk away.