An interesting challenge….

One of my clients is a small business (13 employees) who we’ve had insured with Carrier P for several years. Their situation is unusual, because only 5 of the 13 employees are actually on the plan. The rest have coverage either through their spouse or MediCare (this business attracts a lot of senior citizens looking to supplement their retirement income).

The problem is that carriers have rules requiring that a certain percentage of employees must be covered on the plan. Typically, this ranges from 50%-75%. There are all sorts of games that get played with this, but the bottom line is that, when we wrote the case, Carrier P was the only one who would take it.

Now, the rates have become unbearable. Yet I have been unable to find a carrier to which to move. The two major players in this area – Anthem and United – both declined to even quote the case, let alone write it. Two other carriers also have declined.

One local carrier has essentially told me “maybe;” I’m awaiting clarification. ;-))

And one other carrier has yet to respond to my request.

So, what to do?

Well, there are a number of alternatives, some more attractive than others. One would be to dissolve the group plan, and (attempt to) write each of the covered employees their own individual plans. This method has certain benefits: each person could choose the exact level and types of coverage that they want. Each person would then own that coverage, so portability would not be an issue. And, typically (and paradoxically) individual coverage is less expensive than group.

The downsides are not, however, insignificant: for one thing, unlike group plans, with individual plans there is the possibility that a given employee would be unable to secure coverage, or could have one or more existing medical conditions excluded. Another drawback – particularly for younger folks – is that individual plans don’t cover maternity. Finally, it is more difficult (although not impossible) for the employer to subsidize the premiums on individual plans (i.e. pay for a portion of the premium).

There’s more, of course, but that’ll have to wait for tomorrow.

UPDATE (2/10/05): Well, I've heard now from that last carrier, and they, too, have said "no thanks." The challenge, from my perspective, is that I understand WHY they're telling me "no." What's frustrating is that I just know that there's a carrier out there that wants to say "yes."

More later.