August 21, 2006 by bob.

Q. All I really need is coverage for a large claim. The plan I have now has a $10,000 deductible is increasing the premium so I am looking for something less expensive but with more coverage. I found a plan with a $2500 deductible that is less money. All I really need is hospitalization coverage. I don’t need an agent, would rather shop on the internet. What is wrong with that?

A. Nothing is wrong with shopping around, as long as you understand what you are comparing.

The plan you have now has an at risk amount of $15,000 on a major claim. The plan you are looking at will pay about half your claim, if you are lucky, on a major claim.

A family friend was injured in a car accident in late May. Her bills so far are $680,000 and counting. Your current plan would have paid all but about $15,000.

The plan you are considering changing to would have paid $100,000. You would be responsible for the rest.

Still think you don’t need an agent?

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August 21, 2006 by bob.

Q. I want to offer health insurance to my employees. Not all of them, just some of them. One agent tells me I can’t do that, another says I can. Which one is right?

A. There are several ways to accomplish this, and a few that will cause you problems.

You can offer coverage to anyone you choose, as long as you do not contribute toward the cost of the coverage. You can offer coverage to all those who have worked a year or longer and not offer to anyone else. You can offer coverage to management employees and not rank & file. You can offer coverage to all that are over 6 feet tall and not anyone else.

All of these offers are acceptable (though not necessarily fair), as long as you are not paying any portion of the premium.

Once you pay a portion of the premium the plan is considered a group plan, even if funded with individual policies. When that happens you may run afoul of non-discrimination laws.

Some times agents will tell you to pick & choose the employees you want to cover, then “bonus” them the premium. I suggest you read all the documents you are asked to sign when you set up a list bill arrangement. One of the statements asked you to attest that you are NOT paying any portion of the premium, or bonusing the premium in any fashion.

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