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Limited Medical Plans Need High-Quality Implementation

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You have heard the idioms describing successful salespeople: “He could sell ice to Eskimos” or “She could sell a drowning man a glass of water.”

But how long would someone be an effective seller of ice if the delivery trucks were not climate-controlled? And, what if the glass of water was delivered in that climate-controlled truck? A drowning man cannot drink ice!

Limited benefit medical coverage is another example of a product that can look perfectly wonderful during the sales process but turn out to be perfectly useless as a result of bad implementation and misunderstood benefits.

The limited medical marketplace is growing quickly. As health care costs continue to rise, many employers are looking for a cost-effective way to offer insurance benefits to their hourly, part-time and seasonal workers, who often aren’t able to afford or qualify for traditional major medical insurance programs.

In the limited medical industry, a large amount of premium has been written in the last five years, and people have taken notice of the industry’s growth. New carriers are entering the marketplace, with new distributors looking to ride the wave of the limited medical industry’s success. Chances are high that you now have heard of limited medical or “mini-meds.” There is also a good chance that you are trying to sort out the differences between the many products you have encountered and differentiate between the various programs and carriers.

Here are seven basic things to look for when analyzing the quality of administration at a limited medical benefit plan.

1. Make sure the organization you choose has experience working with hourly and part-time employees. So, you say “wouldn’t all limited medical providers have this kind of experience?” In the short term maybe, but there are several providers that have built a business around a commitment to employers with hourly employees. These companies did not learn about limited medical in the last three years and jump in; they have been working in hourly markets for decades and know just how messy keeping eligibility for hourly employees can be. Experience in this area will allow you to focus your efforts on building future business, not saving accounts that are having problems with an inexperienced administrator.

2. How does the company handle the “missed premium” issue? This is a very important point. Prospects for limited medical usually experience high employee turnover and typically do not pay 100% of the premium for employees. Therefore, the employer is deducting money from paychecks to pay premiums. When you add these two items together, you get varying amounts of premium for a wide range of employees each month. There are at least two proven strategies for dealing with this issue. Good administrators will have solutions that work for your groups.

3. Enrollment. As agents, this could be the biggest risk you face when selling a limited medical plan, especially if you are working with a large multi-location prospect. It is extremely easy to spend thousands of dollars creating print and online enrollment materials and a plan for properly enrolling a group. Does the administrative team you are working with have a cost-effective and proven enrollment strategy? Learn how the commissions split and who pays for marketing and enrollment materials. Paying for materials is a great way to go if your partner can provide you with cost-effective ways to print materials while also getting the enrollment results that make a good case. A great prospect combined with poor enrollment results is nothing more than time and money down the drain.

4. Clientele. You can tell a lot about people by the company they keep. Well, at least that is what our mothers told us, and it always pays to listen to your parents. What kind of clients does the administrator currently work with? Are they similar to your prospect? Is there proper scope and size? Find out what kind of agents they serve. A conversation with some peers who have experience with the limited medical administrator could provide insight into the administrator’s capabilities and track record.

5. Does the administrator work with multiple carriers? As a broker you know there is not a one-size-fits-all plan design that will meet the needs of your entire client base. Having access to multiple carriers enables a provider to offer different programs and lets you look for a plan that is most appropriate for a company’s particular employee base. In addition, the administrator is working in a competitive environment, resulting in the most compelling and cost-effective offerings for your clients.

6. Does the administrator offer flexible plan designs? It is impossible to overemphasize the fact that different employers/groups have different needs. Hourly and part-time employees earn a wide range of wages. Therefore, employers who are prospects for limited medical plans have a wide range of needs. Work with plans that allow for customization so you are offering a plan that best fits the needs of employees and employers. This will positively impact enrollment and help create a better sense of ownership for the employer offering the plan.

7. Has the administrator ever been canceled by a carrier in the limited medical arena? Believe it or not, you need to ask that question. Companies with practices that cause carriers to take that kind of action are companies that you need to know about.


Questions To Ask On How The Administrator Will Handle Enrollment

–Do you have evidence that your enrollment strategy has worked before?

–How will you split commissions?

–Who will pay for marketing and enrollment materials?

–If I pay for printing materials, can you help me get a good deal on printing?