Health Ins. meetings w/ groups of 1099's

[Consultant]

Hello everyone,

I'm going around and talking with groups of 1099 workers and wondered if any of you have any suggestions or can point me in the right direction in helping me with an outline for 5-10 minute morning meetings.

I'm going to talk about the two biggest issues (I think) which is

pre-exisiting conditions (there's always to get approved i.e. small group and (IFP wise) knowing which company is more lenient in underwriting certain medical conditions etc.)

and Affordability - I was going to talk about HSA's here.

I was also thinking about having a game and giving out prizes because I read that its really about making people have fun and comfortable then about the niddy gritty info.

My first one went kinda bland but got two cases of 6 people. This next company has more people. Anyone have any ideas on how to make it light and fun and still engage them into the health conversation?

 

[somarco]

I take it you are going to offer individual plans, not true group.

Your presentation needs to be geared to the education level of the audience. Avoid using insurance terminology. Talk about BENEFITS, not policy provisions. Stress the first dollar benefits such as doc visits, Rx, wellness, accident. Might consider throwing in supp benefits such as a strong accident plan.

As far as underwriting, no one is lenient so get over it. They dont cut any slack because you submit 10 apps at once vs 1.

HSA's for some 1099 groups wont fly, but it depends on the group. Realtors might be a go. Landscapers wont.

Better off using something with a high deductible and fill in the gap with accident & CI plus put some doc visits & Rx copay in the mix.

 

[Consultant]

somarco, I think I see where your going with benefits description. These people are over 45, usually, and I find that many of them have pre-existing conditions. Often they privately tell me they think they can't qualify so I like to break their paradigm that they can't get approved right away.

I know for a fact that some companies compared to others have different underwriting criteria i.e. B.S. of CA approves some diabetic individuals where nationwide, assurant, etc. are auto decline.

I will take you up on your suggestion and talk more along the benefits however. I just think most brokers just spill out benefits and price and I'm looking to set myself apart.

A Regional Sales Manager for Health Net told me to say I'm different by showing H.S.A.'s because its half the price, meaning, half the commission and I'm willing to take it to earn your long-term trust.

Do you know of a good way to ascertain members of the meetings numbers? The only way I got the last two clients was I followed up and the owner told me she said yes to the meeting because she knew those two needed health insurance.

I was thinking about starting a drawing with a prize where they put their business card. That way I can shake up the usual morning meeting and get their info. I don't know if they'd be willing to hand out their cards knowing I'm going to be following up with them. Any other suggestions?

 

[J.R.]

HSA's for some 1099 groups wont fly, but it depends on the group. Realtors might be a go. Landscapers wont.

What makes you think that landscapers are bad clients for HSA's?

-J.R.

 

[somarco]

Past experience.

Low paid 1099 workers are more interested in first dollar benefits. They are unappreciative of the benefit of cat cover and view HDHP's as if they had no insurance at all.

Owners of landscaping companies are different. I have a couple of owners insured on HDHP/HSA. Their grunt labor have nothing and wont pay for anything that costs more than $50 per month.

 

[J.R.]

Past experience.

Low paid 1099 workers are more interested in first dollar benefits. They are unappreciative of the benefit of cat cover and view HDHP's as if they had no insurance at all.

Owners of landscaping companies are different. I have a couple of owners insured on HDHP/HSA. Their grunt labor have nothing and wont pay for anything that costs more than $50 per month.

That makes sense.

 

[somarco]

Couple of ways to approach groups like this. All this presumes a contribution to the health plan by the employer. Absent that, you are pretty much stuck with cherry pick underwriting and selling low benefit plans to keep the premium in line.

One way is a pure group HSA plan. The employer pays all or half the premium (depending on participation requirements by the carrier) for a HDHP . . . say a $2500 per person deductible. If possible, get the employer to chip in another $500 per person per year to the HSA. That gives most of the folks some feeling of a benefit on the first dollar stuff and protects them on the back end against a cat claim everyone swears will never happen to them.

A variation of this uses individual HDHP, possibly on a list bill, where the employer makes a contribution to the HSA for everyone who buys the HDHP. I will do this where employers want to contribute, but also want to discriminate who is covered and how much they put into the plan for each employee. This also makes it easy for the employer to budget the cost of the benefit plan.

Set as a starting point the $500 figure . . . that's $40 per month or $10/week for a benefit plan. Something that can be budgeted by an employer who truly wants to have a plan that employees will appreciate. Too often employers want to make the plan available but dont want to contribute. What kind of plan is that? No one will see that as a benefit. A good plan goes a long way towards creating employee loyalty and reducing turnover. A $10/hour worker with benefits will stay vs leaving to work for the competition who is offering $11/hour.

Back to the money purchase health plan. Everyone who qualifies for and buys the HDHP also gets (at least) $500 in their HSA. There are no non-discrimination rules on contributions to the HSA. The employer can pay more for my HSA than he does for yours. Money placed in the HSA is tax deductible to the employer, tax free to the employee and the employer gets a benefit that is not subject to FICA, FUTA, SUTA or workers comp premiums.

The second alternative is to set up a layered risk plan. You can again have the employer set up a HDHP (does not have to meet HSA rules) and pay the premium for everyone. Rather than having the HSA for first dollar benefits, use some of the supp plans that have little or no underwriting such as the Assurity worksite plans.

Depending on the size group, the age, composition, etc, using fully underwritten products can be counter productive. Take a group of 10 blue collar workers in their 40's, half of them smokers. Out of the 10 (assuming all want the cover) you will have at least half that will be declined, rated or ridered. That leaves you with 5 that might become clients and 5 that are pissed at you.

You might be lucky if 3 of the 5 healthy ones actually stay with you.

Working it the other way with guaranteed issue products paid for by the employer, you end up with 10 clients.

10 clients at 6% commission and the chance to offer ancillary coverage usually beats 3 at 20%.

Think about it.

 

[Guest]

The second alternative is to set up a layered risk plan. You can again have the employer set up a HDHP (does not have to meet HSA rules) and pay the premium for everyone. Rather than having the HSA for first dollar benefits, use some of the supp plans that have little or no underwriting such as the Assurity worksite plans.

This is one of the strategies used by Colonial agents (of which I'm one (not captive at all)). It allows the owner to lower their benefit costs, as opposed to cancelling them. A lot of businesses are dropping major med or lowering their contribution or raising the deduct. In the HDHP (high deduct health plan) concept, workplace voluntary supplements can play a valuable role and they obvioulsy can be tailored to each employee's needs, and best of all they are portable (with a few limitations.)

Al

 

[Crabcake Johnny]

Well noting that this post entails what to do with 1099'd workers all group options are automatically out the window - that is unless the employer is gonna put them all on w-2.

When I worked for companies what normally happened was we'd get a very short group presentation - normally on disability or life - then the agent would be given an office to use and each interested person would sit down with the agent.

That's how I signed up with disability when I worked at BMW. The disability group pitch was about 10 minutes - any longer and it's just boring. Then one by one the interested people sat down with the agent.

 

[Guest]

Well noting that this post entails what to do with 1099'd workers all group options are automatically out the window

Well, Colonial will write individuals for some of their coverages, but not their hospital confinement. Most supplement companies are married to the payroll deduct paradigm as that is one way they can keep costs down. However both Aflac and Colonial are slowly moving toward the EFT/ACH/Credit card methods of paying premiums and starting to target indiviudals.

It's a catch 22 for these companies as they don't want to lose their agents by looking like they (companies) are going after non-agent (web-site) sales and agents don't want to sign up small groups or 1099s as their is not enough money in it for the effort.

With Colonial I will write a group of 4 hairdressers because I might have a shot a writing a (Blue Shield or Aetna (I'm not captive) major-med for a few of them. But otherwise it is is a total time-sink to put two gals on a $20 a month cancer plan or DI given the travel, gas, and paperwork, etc.

Al