Need some thoughts on this.....

Jul 21, 2008

  1. loudee
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    loudee Super Genius

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    I've asked other brokers about this situation but I want as many opinions as possible.

    Here's the scenario(PA insurance):

    I have a possible client(and friend) who is covered through a group policy but wanted to lower his rate with individual coverage because he's in good health. He had a group plan that was set up for a restaurant he owned. The restaurant has since closed but he kept the group insurance for himself and (2) others. The (2) others have had serious health problems and he wants to make sure they'll still have coverage if he leaves the group. What should I tell him? I thought since the business was closed the group could not continue. I don't want him to be without coverage but I also don't want to put myself up for a E&O claim. Any advice.

    Lou Del Ricci
     
    loudee, Jul 21, 2008
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  2. Guest
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    Guest Guest

    Just be honest and follow your gut. If after explaining the potential disasters you think that it may cause future problems for you, politely decline the opportunity. But again, be honest in your assessment of the situation to the client. If another agent wants to lie, that's not your problem.
     
    Guest, Jul 21, 2008
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  3. loudee
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    loudee Super Genius

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    Rob,

    Should I let him know that if ever he had a serious health condition and they found out about the "bogus" group then he would be liable for his medical expenses or just keep my mouth shut? I don't want to open up an E&O.

    Lou
     
    loudee, Jul 21, 2008
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  4. moonlightandmargaritas
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    moonlightandmargaritas Guru

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    If the group plan is canceled, they become HIPAA-eligible. For states with a risk pool, they go in there. Without a risk pool (like FL for instance) they get a guaranteed conversion policy. Won't be necessarily cheap, but not left out in the cold...

    Lou, lemme ask you this...Pat's or Geno's?
     
  5. loudee
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    loudee Super Genius

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    Easyyyyyy answer-----> Geno's!

    Lou
     
    loudee, Jul 21, 2008
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  6. loudee
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    loudee Super Genius

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    Two of the three employees had some serious health problems(cancer) in the last few years. Would they be liable for reimbursement being the group plan should have ceased when the business closed years ago?

    Lou
     
    loudee, Jul 21, 2008
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  7. moonlightandmargaritas
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    moonlightandmargaritas Guru

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    Lou, in the event of a BIG claim, the insurance company investigates. If it is not a bona fide group...
     
  8. Guest
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    Guest Guest

    Lou, it seems you have some good answers here possibly confirming your thoughts. Just let them know their options and what they can expect and they can decide.

    I've seen many people change their minds about being loyal to others when they realized they could save a chunk of change.
     
    Guest, Jul 21, 2008
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  9. Winter_123
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    Winter_123 Guru

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    Dont get involved in explaining anything to him. Just walk away. Aside from what an insurance carrier may allow or deny, you do not want to have a client who has acknowledged to you that he potentially is involved in a fraudulent insurance scheme which is what a fictitious group is. Just stay out of it.

    Winter
     
  10. somarco
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    somarco That Medicare Expert Guy

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    I concur 100%.

    This is not something you want any part of. It can get real messy very quickly.
     
    somarco, Jul 21, 2008
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