Group Health

[Arno]

Do any of you guys write group health insurance? Any tips you can offer? I was reading in one thread about calling small businesses to offer individual insurance, but there was no mention of writing small group policies. It seems like it would be advantageous for an employer if he himself were difficult to insure.

 

[Dave020]

I write a lot of spousal small groups (2 EEs) as group plans have richer benefits, lower deductible and OOP, are tax advantaged and in California GI for groups 2-50.

I try to discourage employers of small groups from doing the individual thing as inevitably there will be at least one employee who can't qualify for coverage.

I prefer to work 2-5 employee groups with special emphasis on spousal type groups. They are not difficult and tend to stay with you with less BOR problems.

In CA, Cross offers a regular small group product portfolio as well as a newer, stripped-down portfolio called "BeneFits" which is very user friendly to small employers with not much budget for health insurance.

Dave
www.davefluker.com

 

[Sam]

http://www.insurance-forums.net/viewtopic.php?t=24&highlight=101

 

[Bob_The_Insurance_Guy]

I agree 100% with Dave. Many of my small groups are family establishments, and you are right, they stay on the books a very long time, and provide you more leads, and are welcome to discuss other products with you.

More and more companies, though, are getting wise to this, and will do more extensive underwriting for just a 2-person (husband and wife) group.

 

[Dave020]

That is no joke. I write it either Blue Cross CA, Kaiser (if that is what they want) or a regional HMO in Sacramento area called Western Health Advantage if they live out there and want that.

Those are the only three carriers in CA that will give spousal groups a fair shake. Shield wants bank account records, draw receipts and so on as does Health Net. Too much restriction.

Cross is best in my book, if it is AB 1672 qualified, they don't have a problem with it. Prove you're a legitimate business and Cross will do spousal all day. In fact, only Cross will allow two spousal officers to be on one application thus no second employee. That save my clients tons of money as the combination beats any other pricing method for getting them insured.

Now Kaiser will allow Sole Props onto plan as long as both spouses are on the tax return somewhere and they enroll as the two employees. WHA will allow both on one application under Sole Proprietorship as long as the business grosses 40K or more a year. On Sole Props, Cross requires one of the spouses to be on payroll so it is more difficult with them however I usually have the client change over to a partnership or corp.

All the little rules are fun, and I enjoy doing teeny tiny small groups all day long - it sure beats individual underwriting (decline city) these days.

Dave
www.davefluker.com

 

[Bob_The_Insurance_Guy]

And, it is also the most overlooked by insurance agents. Everyone wants the "big" groups. Noone is paying attention to the small employers. You get to build more of a relationship with the small employer groups, and you're not looking over your shoulder as much.

My target market is no more than a 50 person group. In fact, my largest group, on the books now, is 34, with 8 employees in neighboring states.

Selling is like ice-fishing. Find your spot, dig your hole, and fish where the water's deep. Let someone else stay up at night, wondering if their competition is going to undercut them by a penny a month, and lose the business. Too much turnover in large groups.

Mom and pop shops will be more welcoming to you, as you approach them with other products. They are MUCH easier to get hold of.

For the past 25 years, the small employer/entrepreneur has been the largest growing segment of business population. Why worry about getting laid off, when you can take your talents, and guarantee yourself never to be fired again? All it takes is intestinal fortitude, and getting downsized one too many times.

It also doesn't hurt if you throw some business your client's way. And that's easy to do, when you both are small business owners, and understand what each other has to offer.

 

[TriDad]

good advice guys...the under-50 group market is a great market to be in...and can provide opportunity for cross-selling.

 

[bcbroker]

I sell a lot of group and also provide group leads for other agents.

 

[OneMorePolicy]

That is no joke. I write it either Blue Cross CA, Kaiser (if that is what they want) or a regional HMO in Sacramento area called Western Health Advantage if they live out there and want that.

Those are the only three carriers in CA that will give spousal groups a fair shake. Shield wants bank account records, draw receipts and so on as does Health Net. Too much restriction.

Cross is best in my book, if it is AB 1672 qualified, they don't have a problem with it. Prove you're a legitimate business and Cross will do spousal all day. In fact, only Cross will allow two spousal officers to be on one application thus no second employee. That save my clients tons of money as the combination beats any other pricing method for getting them insured.

Now Kaiser will allow Sole Props onto plan as long as both spouses are on the tax return somewhere and they enroll as the two employees. WHA will allow both on one application under Sole Proprietorship as long as the business grosses 40K or more a year. On Sole Props, Cross requires one of the spouses to be on payroll so it is more difficult with them however I usually have the client change over to a partnership or corp.

All the little rules are fun, and I enjoy doing teeny tiny small groups all day long - it sure beats individual underwriting (decline city) these days.

Dave
The David Fluker Health Insurance Agency - Gilroy, California - Serving California Residents Since 1995

Dave,

Is your Feb 2007 post mostly accurate today regarding Cross and Kaiser and WHA being the most accommodating to work with, or has the roster changed?

Regarding Kaiser if its a sole proprietorship, do both spouses need to named on the Schedule C or only on the 1040 Tax Form?

Regarding Cross and helping the client switch from a sole proprietorship to a partnership or corporation, do you refer them to a CPA or legal type for that, or have boiler-plate forms and links readily available?

Regarding "proving" you're a legitimate business to Cross, how new can the operation be and what's the minimum documentation you've seen? I'm thinking a startup with a new lease at an office building, plenty of documentable experience in their profession. Would Cross accept them?

Thanks again if you could respond.

 

[Dave020]

Yes, some things have changed since then, but change is good, right? LOL

Ok,

Currently the batting order goes like this for me:

Blue Cross - as long as not a Sole Prop all is good.
Health Net - has changed now takes all including SP as long as on Sched. C
Kaiser - well, if they must, still good for SP and will do carve-outs down to two lives GI

WHA - such a limited areas (Sacto) ok for SPs with $40k income or greater both names on tax forms.

I would need to check on the 1040 vs. Schedule C but as I last understood it:

Health Net - both names must be on Schedule C
Kaiser - both names 1040 and/or Schedule C
WHA - same as Kaiser

Also, Health Net is doing like Blue Cross and allowing full open portfolio for groups as low as 2. Their version of Emploee-Elect.

If the question comes up about how to change to a Corp/Partnership, I usually tell them to talk to their attorney or CPA. Some people do the online boilerplate, which is fine.

Cross requires proof as follows:

For SPs with DE-6 payroll EEs: License or Ficticious Statement, DE-6 previous quarter (or substitute if not in business long enough to file one)

For Corps: Corp agreement pages showing officers, DE-6 if applicable, statement of domestic (either inc. in CA or allowed to do business in CA - it's in a a database that they check), License or Fict. listing, copy of Federal Tax ID#

For Partnerships: Basically the same as Corps but may request K-10 if in business long enough.

Cross will accept anyone who meets the basic AB 1672 definitions. The only requirement they have beyond that is that the business must provide a good or service to the public. They don't want cat breeders and Amway people getting GI group coverage.