Look Before You Leap

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People are talking a lot about “mini medical” or “limited benefit” insurance plans these days, but because these plans are so new, not many people know what will make the plans work and what will guarantee a failure.

Even within the mini med sector itself, because of high levels of carrier turnover, it is rare to find someone marketing the product who has much experience in the mini med niche.

If you are lucky enough to find one of these rare, experienced mini med marketers, chances are that you will be talking to a marketer with a high level of persistency. When you talk to marketers who have succeeded at retaining mini med business, you will find they share the same basic strategy: Supply quality service and a seamless plan that actually works.

A mini med carrier that works can literally save low-income and moderate-income employees’ lives, by encouraging them to seek routine preventive care and, in emergencies, giving them the ability to at least enter the system as private-pay patients.

But finding a mini med carrier that offers high-quality customer service can be difficult because many carriers in the market have a hard time living up their promises.

Here are some topics to consider when helping clients look at mini medical plans:

1. General customer service. Common mini med service problems include delayed claims payment, unreturned phone calls to employees and human resource personnel, and extreme delays in distributing fulfillment packets to employees.

2. Billing and eligibility issues. Running a mini med plan can lead to huge amounts of administrative work. In fact, this is where many mini med plans completely break down.

The industries most likely to use mini med plans are ones that have constant employee turnover. Benefits administrators are slow in communicating information about new hires and terminations, and they are constantly changing eligibility information. Because the administrator has out-of-date eligibility information, the carrier sends the employer an incorrect bill. The employer may refuse to pay the bill until a correct bill is received. Some time later, the carrier sends a corrected bill and the employer pays it. Meanwhile, claims are left unpaid because the employer has not paid the premium.

3. Outsourcing. Some carriers and marketers put mini med plans together by packaging the services of many different vendors together in a single product. Separate companies may handle call centers, claims, provider network management, billing, ID cards and fulfillment.

The completely outsourced “virtual company” looks great on paper. But a mini med plan set up in that fashion cannot provide high levels of customer service. When too many vendors are running a mini med plan, it is nearly impossible to get all of the vendors to come together with required information in a timely manner.

4. Provider networks. Many mini med plan organizers give plan members discount cards rather than setting up true preferred provider organization networks. Medical office staffers who see a discount card may believe that the patient merely has a discount card. The staffers may not believe that the patient has any insurance benefits, and they may try to collect payment in full from the patient at time of service. Employees will be better off if a mini med carrier offers a true PPO network, and if the network offers discounts for care that is not covered by the plan as well as for care that is covered.

5. Prescription drug discount and insurance benefits. An ideal mini med drug plan will offer specific co-payment levels for generic drugs and preferred brand name drugs. These plans are simple to explain, and employees can see how to save money by using drugs on the plan formulary, or preferred drug list.

Some mini med drug plans offer a set dollar amount of reimbursement, such as $20. Employees who have these plans have no formulary to guide them and never know what a prescription will cost until the prescription is filled. Moreover, when a plan has no formulary, employees may become victims of pharmaceutical incentive programs that encourage physicians to prefer certain medications over others.

6. Due diligence. Agents are responsible for knowing who they are partnering with and exactly what products they are selling.