Selling Individual to Businesses

Out of curiousity, what state are you writing in?
Most carriers frown on trying to do IFP's as a group replacement. Doesn't mean it can't be done.

This question is asked about once a month on the board. You'll get every answer under the sun.

Once you've been down the group vs IFP route a few times, you'll usually know in about 30 seconds of talking with the decision maker which way to go. Now, a lot of agents don't like writing group, some don't like writing IFP. it all depends. As you can tell in the conversation, it also varies by state.

In my experience, once you have over 10 employees, the discussion is always group. I know people will push IFP above that number, but you'll almost always run into at least 1 in 10 that have an issue that makes group a better deal overall (i.e, high cholestoral, overweight, high blood pressure, depression history, etc, etc, etc, all the same person....)

There are also tax complications if you go the IFP route. This can be addressed, but it's part of understanding the differences.

Dan
 
For all of the naive ones out there, here is some straight up sage advice.

If an employer is contributing either directly or indirectly to the plan premium, by law, it must be group, i.e. employer sponsored coverage.

The key term is indirectly. Everyone understands directly. Nobody seems to understand, or want to believe, indirectly. Example: Employer "bumps" employees pay by enough to help cover individual insurance premiums.

THAT is indirect sponsorship, which triggers group participation rules.

Anytime you are dealing with an actual employee, be aware!

If you are dealing with the spouse or children of an eligible employee, be aware! If there are any pre-x situations, never mind declines, you are subjecting yourself to huge risk exposure.

My advice. Just pass. It ain't worth the risk in the long run. And I don't care about how many times YOU'VE DONE IT THAT WAY without "any problems." Irrelevant to the discussion of future risk.

'nuff said.

The oracle has spoken.

;)
 
If an employer is contributing either directly or indirectly to the plan premium, by law, it must be group, i.e. employer sponsored coverage.

The key term is indirectly. Everyone understands directly. Nobody seems to understand, or want to believe, indirectly. Example: Employer "bumps" employees pay by enough to help cover individual insurance premiums.

THAT is indirect sponsorship, which triggers group participation rules.

An ignorant opinion - at best. Are you familiar with Section 105 Health Reimbursement Arrangements?
 
An ignorant opinion - at best. Are you familiar with Section 105 Health Reimbursement Arrangements?

Listen moron. An HRA has absolutely nothing to do with whether to market health insurance TO individuals who work FOR a company where group sponsored coverage may be in place.

Who's the real moron here?

Look in the mirror you buffoon.
:nah:
 
This has been an interesting post.... not sure who's making what point on the HRA, but don't confuse HRA's with insurance at all... they are NOT connected.... said another way.... there is no requirement to own health insurance if you install an HRA.

It is simply a reimbursement account and individual health premiums ARE ALLOWED to be paid with HRA dollars... so I guess that's where the connection to marketing to groups with the individual concept comes into play.

Over the last 3-4 years, this topic of conversation (getting rid of group and making EE's buy their own) has surfaced with a number of my clients... but rarely, if ever, do they act on it.... but it sure is a feel good conversation....... "Get me out of this group health racket"!!!!!

I thought in Florida (don't know since I work in Georgia) had a law that individual could not be written if you have been covered by that employer for group in the last 180 days.... thought I recall something on the GR List Bill application about that? Floridians? Care to comment, is this true!????
 
Same in Texas. Can't use an HRA to reimburse premium. Some other states do allow it is my understanding.

It sounds like a great idea and should work if you do it right, just hard to get people to change. If you do it you'd better have good friends in Austin at TDI.
 
Your ignorance is showing...

Maybe you should re-read some of these posts V-E-R-Y-S-L-O-W-L-Y pal. :D
then you can apologize via PM :yes:

------

For all of the normal folks interested to learn how to get group clients off of group without having to worry about a certified letter from the Commish:

1. Employer must cut ALL ties to any sponsorship of any group plan. This is main key, and this is what is difficult. Inevitably, there are health issues with one employee or their precious little 4 year old that keeps the entire group in "stuck" mode (assuming you're doing it the right way).

2. Cutting ALL ties means no reimbursement of premiums to any extent, including -- and this is critical-- including the tactic of inflating wages to compensate for the cost of individual coverage. Any time you get into a "list billing" option for purely individual major med, you are asking for trouble. Waivers are helpful but will not keep a sharp eyed shark lawyer from suing your pants off (yes your pants) in the event that everything is not doing just right and somebody has a killer claim.

3. Once all ties to group sponsorship have been severed, then you can look at installing various different options, including a 125 plan. The key is non-discrimination, coupled with a complete lack of mandatory participation in any kind of individual plan. Here's $150/month. Do with it as you wish from this list of options.

4. A medical reimbursement plan can be installed ON TOP OF a 125 plan (hey moron-are you listening?):biggrin:

Those are the basics.

The oracle has spoken.
 
This is a great thread and one I have thought about for a while. I think some of the answers are very state specific.

This applies to Michigan only........I have no idea of the legality of this, but what I do know is it doesn't pass my first rule of selling a policy. That is, if I have to think about it when my head hits the pillow at night I don't sell it. And with the options here in Michigan, I would be thinking about it at night.

In Michigan i.e. on a small group a new employee is covered if the enroll in their window. It may have an adverse effect on the group policy at renewal, but they would be covered.

Now let's assume that the employer pushed everyone off to individual and either raised their pay or had some other arrangment.

It worked, all 4 employees qualify for a decent policy, GR, Aetna, Humana, etc. Employee number 5 is hired, not so good health, has to do a BCBS policy (the insurer of last resort) and it has a $2500 drug cap.

Employee number two comes down with the same condition as employee five has. Let's assume they are in the same title, rank, etc. In a conversation number two says, man I am sure glad I have that $30 copay for "X" drug. Employee number five, what are you talking about, I have been paying $800 a month out of my pocket for the last 3 months.

Legal? I don't know. Is employee five happy, No. Does employee 2 start wondering why the boss ditched the group plan, yes. Is the owner happy, no. Would he be happy with the agent, no.

His business will suffer.

This may work in other states, but I wouldn't do it in Michigan. When you start treating people at the same level differently, even if it is legal, it will bring problems into your organization, and problems to my beauty sleep and I need a lot of that.
 
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