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Costco Tests Health Plans In California

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Costco Wholesale Corp. says it is testing two health insurance plans for its executive members and members of their families.

The warehouse-style retailer will test the plans in southern California. If successful, it will offer the plans statewide by year-end, says Dellanie Fragnoli, assistant vice president for insurance services for Costco, Issaquah, Wash.

The plans are targeted to individuals and families who do not have health insurance through their employers, are self-employed or do not qualify for group health insurance, Fragnoli says.

PacifiCare Life & Health Insurance Company, Denver, will offer the plan to executive members of Costco’s 34 stores in Los Angeles and Orange counties in July. It will give them a choice of two preferred provider organization plans, each with different deductible levels, at rates 5% to 20% below rates for similar plans in California, according to Fragnoli.

The plans will be sold through Costco’s Web site and a dedicated call center.

Costco already offers a small-business health insurance program for executive members in California, Washington, Oregon, Nevada and Hawaii. The new individual plans are generally less expensive than the small group plans but, unlike the group plans, are not guaranteed issue, notes Fragnoli.

Costco has been offering financial products to small businesses and individuals for a number of years. For several months, the company has been testing sales of fixed annuities to customers in Colorado, Georgia and Michigan through Symetra Life Insurance Company, Redmond, Wash.

It tested a 401(k) plan three years ago but then withdrew it for unspecified reasons.

Other financial services it offers include auto and homeowner insurance, available through the American Express Property Casualty Companies to members in 37 states and Washington, real estate and mortgage services, and financial planning.

Costco operates 335 warehouse stores in the United States and Puerto Rico.

The company already offers a small-business health insurance program for executive members in a number of states


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