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Is there a place for Limited Benefit Plans?
- Thread starter JRoot
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Limited benefit plans are good for those who can't or won't buy major medical. They might also be OK as a supplement for those who can't afford the full cost of major medical. They are not a substitute, but they're usually better than nothing.
I'm currently finishing an auto dealership deal with 50 employees that had two plans in place, one for management (but available to all) that was a major med and the other was a horrible Limited Benefit Plan. They were from different companies and both of them were over priced crap. I stayed away from putting them with Aetna, who has a similiar but better Limited Benefit plan, just because the employees really wanted and needed major med. It's been rough in underwriting, but I think for roughly $100 a bucks a month more per person. I've been able to get them a dual option plan that the employer and employees can actually afford. I do like giving the employees at least two options whenever possible but your better off finding them a higher deduct with a larger copay and maybe a discount card for prescriptions then some only slightly cheaper limited benefit plan.
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I'm not against them and I'll wager my experience in this biz is right up there with the best of the best on this forum.
You have to remember what the goal is....
I would agree that catastrophic coverage is the purpose of insurance, but let's face it... many families live paycheck to paycheck and can't afford even catastrophic coverage.... and if getting the premium to an acceptable level mean taking a $10,000 80/20% plan... then I'd wager to say they'll be bankrupt with OR without the coverage.
Part-time employees who have no access to group models and can't qualify for coverage are good candidates for Ltd Bft Plans....
Think they're going away..... hmmmm.... the big-boys don't think so..... SRC bought by Aetna..... AIG has a Ltd Bft Plan..... it's becoming mainstream and if you don't think so... I would encourage you to Google it and read what the WSJ and other rags that major EMPLOYERS read.... and what is being said.
I would agree that I don't want to spend my life marketing these... but the qeustion was do they have a place..... of course they do.... and that place is expanding each month as traditional health coverage continues to rise out of reach of an ever expanding group of lower paid employees.
Why is there a seafood cafe' at SeaWorld?
You have to remember what the goal is....
I would agree that catastrophic coverage is the purpose of insurance, but let's face it... many families live paycheck to paycheck and can't afford even catastrophic coverage.... and if getting the premium to an acceptable level mean taking a $10,000 80/20% plan... then I'd wager to say they'll be bankrupt with OR without the coverage.
Part-time employees who have no access to group models and can't qualify for coverage are good candidates for Ltd Bft Plans....
Think they're going away..... hmmmm.... the big-boys don't think so..... SRC bought by Aetna..... AIG has a Ltd Bft Plan..... it's becoming mainstream and if you don't think so... I would encourage you to Google it and read what the WSJ and other rags that major EMPLOYERS read.... and what is being said.
I would agree that I don't want to spend my life marketing these... but the qeustion was do they have a place..... of course they do.... and that place is expanding each month as traditional health coverage continues to rise out of reach of an ever expanding group of lower paid employees.
Why is there a seafood cafe' at SeaWorld?
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They've gotta recoup some costs when Shamu croaks
...don't tell John P. what the crusted grouper really is LOL
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Dave: Funny you mention Shamu.... I actually used to be a trainer.... back in 1975-77...... long time ago.......
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It is true.. Many companies are moving toward limited benefit type plans for their employees. I read a study and can't remember the exact timeframe or stats, but it appears there is a huge push in that direction.
You also have to look at all the big carriers getting into the limited benefit plan business...
With that being said, I'm always going to do what's in the best interest of my clients. In most cases, that's not a limited benefit plan. I have yet to see one that was substantially lower than most major medical plans, unless there was an insurability issue. And, in TX, if a person has insurability issues on Major Med, they should go to the state risk pool.
It will be interesting to see how the industry evolves over the next few years.
You also have to look at all the big carriers getting into the limited benefit plan business...
With that being said, I'm always going to do what's in the best interest of my clients. In most cases, that's not a limited benefit plan. I have yet to see one that was substantially lower than most major medical plans, unless there was an insurability issue. And, in TX, if a person has insurability issues on Major Med, they should go to the state risk pool.
It will be interesting to see how the industry evolves over the next few years.
