BEAVERCREEK – The Greater Dayton Professionals Chapter of BNI, Business Network International, will be holding a special visitors day event from 7:30 am to 9:00 am on Thursday, April 8, 2010 at City Barbeque in Beavercreek, located at 2330 B N. Fairfield Road. The special event is free to attend and open to all entrepreneurs, business managers and sales professionals who would like to grow their businesses and expand their professional network.
Originally established in 1999, the leadership team of the Greater Dayton Professionals BNI chapter remains diligent in its efforts to hire the most professional, productive people for the organization. The membership is currently made up of 25 businesses including a marketing firm, real estate agent, mortgage lender, electrical contractor, HVAC service and a law firm. So far in 2010, the members have passed more than $73,000 in closed business.
Gery L. Deer, writer and managing director of GLD Enterprises Media Group, is the vice president and public relations coordinator for the chapter. “We welcome visiting business professionals to any of our weekly meetings,” Deer said. “Because potential members apply for a position within a specific professional category, this event provides them with the opportunity to observe the process first-hand and submit an application ahead of the competition.”
The international BNI organization was started by professional networking guru Dr. Ivan Misner in 1985 and now has more than 5,000 chapters world-wide. The goal of BNI is to help members develop a profitable referral network free of internal competition, something unavailable from chamber organizations or service clubs. Through the BNI structure, a network of professional connections can grow well beyond the core group and extend the reach of a small business to unrealized potential customers.
In the BNI strategy, each member tries to learn as much as possible about the others to the extent that they can give an informed recommendation to potential clients. Every week members give a 60-second sales training presentation from which the others learn more about their work and what constitutes an ideal referral.
“In order to pass a referral to another member of our chapter, the giver is required to have already communicated with the subject beforehand,” Deer explained. “Qualifying the referral in this way before passing it, rather than giving random, unqualified leads, is what separates BNI from other organizations and nearly assures a closed sale.”
In addition to providing the opportunity for expanding one’s professional network, the Greater Dayton Professionals Chapter of BNI also offers extensive education in the areas of business growth and networking. Each member is required to attend a Membership Success Program which provides the basic instruction for new BNI members, while the Educational Coordinator of the chapter gives weekly networking education presentations to further help people succeed.
The meeting will begin promptly at 7:30 and visitors to the chapter are encouraged to bring at least 30 business cards, as well as any fliers or brochures they wish to distribute to the membership. A brief visitor orientation will be held immediately following the business meeting. For more information go online to www.greaterdaytonpros.com or contact chapter president Sharon Zeljak of Automated Advantage by calling (937) 427-3277.
This book begins by dispelling the common misconception that technology and social networking is the main component of business start-ups. The author tells the reader that her book will “detail strategies and techniques for success,” so that you already are aware that this is more than the regular fly-by-night self-help book. Cynthia Kocialski’s focus is on helping to transform an idea into a business that will last.
Kocialski breaks her book up, not into chapters, but topics including: common questions or situations fledgling entrepreneurs face during their initial start-up period. Kocialski also explains how entrepreneurs act in and outside of a business setting and how they possibly see themselves or fit within certain business frameworks. She notes and makes an active point that start-ups and businesses will not always run as planned. In addition, she is very detailed in her explanations of the book’s major topics and takes care in making sure her audience and other readers thoroughly understand their role as entrepreneurs.
As a reader, I felt that Kocialski took the time to address any concerns or doubts I might have had about starting a business. Also, the short sections helped to keep me interested and looking forward to the next tip to come. Throughout the book, there is an emphasis on technology and technological products. Kocialski makes sure to guide the reader through looking at the details of their business plan and what many investors may focus on. Also, when considering investing in a company, she stresses the importance of teamwork. Overall the section on investors is very compelling and an eye-opener.
Kocialski takes the time to define each of her topics, such as marketing, advertising, funding, and customer profiling. In addition, her use of anecdotes makes reading the book more enjoyable. Although her sections and details may seem repetitive, each one brings a different perspective and provides deeper insight into the world of start-ups.
Kocialski uses language that the average American can relate to and understand. There is a feeling of ease as the book proceeds from topic to topic. Unlike many “self-help” books, Start Up from the Ground Up does not use “suit and tie” language that is unappealing to most audiences, but rather conversational language that guides the reader from the beginning to the finish line. She seems to want to be eager to relate as much as possible to her audience.
Kocialski does not stray far from her own personal style. There is not much to elaborate on because it is a 214-page self-help book. It may be a bit friendlier in its writing style than most self-help books in describing its concepts but is still very straightforward. Start Up from the Ground Up brings the reader from start to finish thoroughly, hitting, major and minor points. There is a reoccurring theme of technology throughout her book which could possibly discourage the reader from starting a business that strays from a business start- up not focusing on technology as its main theme. There is a summarizing chapter, but there is not necessarily a conclusion. The book just seems to end on the ground level.
I’m always entertained by the antics of the self-proclaimed homeless. While I can appreciate that homelessness in America and the rest of the world is a problem, I am always amazed and a little bit angered by the poser homeless I see. Are you really that lazy that homelessness would be your full time job? I mean, telemarketing, handing out flyer’s on the street, cashier, or janitorial are all jobs which don’t require too much discernible skill. And they pay a wage; granted you’re not going to break the bank on your flier distributor job, that’s still no reason to turn to begging as a means to an end. It’s still considerably more work for the possibility of no payoff.
I was driving home from work yesterday (even my job as a front desk clerk at a hotel only requires that I show up dressed and shaven) and I was coming off the highway at Van Nuys Blvd from the 101. There was a young man standing with a rather large sign; maybe an off-ramp marketer, I presumed. He was young, tousled blond hair, over sized expensive looking JanSport backpack, clean khakis; generally looked like a person you’d see walking around any neighborhood anywhere.
His sign was the interesting thing and it came into focus as I’d neared. It was large poster-board and it had individual lettering (like lettering you’d find on a professionally made sign whose message would change; fast food sign lettering). The lettering read, “T-O-U-G-H T-I-M-E-S — NOT A CAREER CHOICE.” I zipped past him in the right lane (he was on the left side) but I understood that he was asking for money, a lift, or what have you. But as I cruised by I thought, “that kids not homeless.”
Eah, it’s no different anywhere else in Los Angeles; everyone is so fake and plastic; might as well have fake homeless people. Still, it made me mad. There were real homeless people who needed whatever handouts this kid was getting much more than he did. The only real excuse I could think of for this travesty might be if this kid were like an investigative journalist and he were trying to, you know, uncover the way that beggars are treated in an expose story (note to self: become a beggar) or if he were a sociology student or something; doing some grad school paper about the subject. But for the love of Christmas, dress the part! You know? Don’t show up in your best khaki’s with your full on JanSport backpack and your intricate sign. Because this sign was so intricate, the fact that you even had it meant that a) you were a fake or b) you were a thief. And who wants to support a fake or a thief?
As disheartened as I was by this display, I kept going. I picked up my lovely wife and we jettisoned off to our fun afternoon in another part of Los Angeles, when I almost stopped in my tracks. While getting on to the 405; about a mile from where I’d gotten off the 101 not an hour earlier was a blond haired girl with tousled hair, swanky denim, and an individually lettered sign standing along the side of highway.
“Oh no…” I groaned.
“What’s wrong?” asked my wife.
-Fake homelessness is what’s wrong. If we’re really so smug that we would give to the homeless at all, who probably have an addiction or other issue of some kind, go home and write a check to the Red Cross, United Way, or other worthy organization. Let’s make the barriers to entry so high, the payoff so small, and the ease startup so difficult, that people would rather have a career in the most menial type of service industry, than resort to homelessness. It’s the people who give to people like these two jokers that are the problem; stop giving and we can stop making homelessness even an interim career choice.
The first use of insurance was to insure property for over sea voyages. Soon after there was insurance for property that didn’t move, buildings, inventory, raw materials, and the like. It wasn’t until recently that life insurance has come into its prime. In the beginning of the 20th century limited life insurance policies were written to cover the cost of funerals but that was as far as they went. Then in the 1950’s people began to realize the need for health and life insurance as a means to offset unexpected occurrences.
The reason that health and life insurance started to become commonplace is that for all of the time that people were insuring their property they weren’t insuring their greatest asset. Unless someone is independently wealthy the greatest asset they have is their ability to earn money. This ability to secure a paycheck far outweighs any current asset that someone may have.
What is Economic Death
Any unforeseen event that limits the ability of an individual to secure a paycheck is considered an economic death. Even if the event is not substantial enough to force a person completely out of work, if it significantly lowers the income attainable, it can be construed as a partial economic death.
For example, Joe Smith works at a factory where he makes $50,000 a year. If he works for 40 years he can safely assume he’ll make $2,000,000. With a little financial planning this should be enough to assure him a nice retirement.
However, there are several circumstances that could limit this potential income. There are potential accidents, illnesses, or economic situations that may cause him to either not be able to perform his job or cause his company to go out of business. These situations, these risk factors, are considered his exposure.
Three Types of Economic Death
- Physical Death – This is the one that most people think of when life insurance is talked about. This is meant to compensate for the lost income of the insured upon premature death.
- Retirement Death – This is when the insured reaches retirement age without having amassed enough cash to sustain a living after no longer being able to work. There are multiple different policies designed specifically to help an individual compensate for a shortfall of income during the working years.
- Living Death – This is the term for a person who has suffered, through injury or illness, a disability. In this case the insured has not dies so although the income has stopped coming in the expenses have not. Disability insurance is often packaged with medical insurance because the two occupy the same financial area.
How Can an Individual Respond to Risk
There are four universal responses to risk. These responses, and the actions they produce, define the probability of an individual succeeding or failing in the avoidance of serious risk repercussions
- Avoidance – This is the most impractical of the choices. For instance, it makes no sense to try to avoid illness by not going out into public and staying locked in a home. This limits earning potential almost as much as the illness itself would have.
- Reduction – Trying to reduce the risks involved in life is a reasonable alternative. Eating healthy, exercising, and staying up to date on immunizations are all good ways to reduce the chances of becoming ill. Choosing a career that involves less dangerous activities would also apply here.
- Retaining – There is also the option of retaining the risk and offsetting it by setting aside individual assets to cover in case of an emergency situation. This is the “rainy day fund” scenario and may work on a short term basis but is lacking if the emergency becomes permanent.
- Transfer – This is what health and life insurance is about. Individuals purchase policies to transfer the risk of economic death to an insurance company for a set premium. This premium is dependent on several factors and generally is higher the longer one waits to employ it.
Risks that are Often Insured Against
There are an almost unlimited number of risks that can be insured against. Lloyd’s of London has become infamous for insuring celebrity body parts from Keith Richards two million dollar hands to Mariah Carey’s one billion dollar legs (CalgarySun.com 9). These are far from the norm but anything can be insured for a price. For those of us without such outlandish salaries the most common risks that are covered are accident and sickness.
These risks are monetarily offset in a legal contract that sets a premium (payable at a set interval) for an individual to obtain a lump sum disbursement upon either the completion of a set term or upon the occurrence of the risk that was being contracted to offset.
Health insurance coverage is important because one never knows when one will become ill. Granted, health insurance can be costly. Also, there are life circumstances which can make it seem impossible to get adequate health insurance coverage or payment of costs. For instance, denial of claims, reduced retirement benefits, job layoffs, and pre-existing conditions can be burdensome. Fortunately, there are ways to deal with these challenges.
Health Insurance Enrollment Choices and Subsidies
If working for an employer who offers health insurance coverage, during the open enrollment period, sign up to get a flexible spending account. The benefit of this is that one can use up to $5000 tax free to pay for out-of-pocket medical expenses. Also, participate in a mail-order prescription opportunity which enables payment of half of what one normally might pay for prescriptions at a drug store. In addition, purchase generic prescriptions when possible.
Until 2014, purchasing low cost group health insurance coverage via a professional association is one option to reduce health insurance costs if one is self employed or if an employer has suddenly cut health insurance benefits. However, in 2014, individuals with low income or middle income will be able to get subsidies that will enable them to purchase health insurance.
Stick With Medicare for Health Insurance as a Senior Citizen
If one has an illness and wants to be able to see any physician of choice, it is better to stick with traditional Medicare coverage. Also, most likely, getting Part D coverage for prescriptions along with Medigap can be a helpful choice to cover deductible costs and co-insurance costs.
Of note, some senior citizens have been signing up for private Medicare Advantage plans rather than the typical Medicare coverage. However, the fees to the plan administrators are going to be cut and there are concerns that some of these administrators will cut benefits or leave the health coverage market totally. That is why staying with Medicare coverage could be the best bet.
If Health Insurance Claims are Denied Keep Trying
If a claim is submitted and it gets denied, try again. In fact, chances are strong that the claim could get paid if one is very exact in going through the process described in the denial note. Always appeal in writing and send it via certified mail. In a formal letter, include documentation and be specific in the response to the reason that was given for the rejection of payment of the claim.
Also, include discussion of what the illness was, previous treatments that failed, consequences of not being able to receive care, medical records, and also put into the packet a note from the doctor. If the medical procedure was experimental, attach a copy of a medical journal article which says that the treatment can be an effective treatment. Or, if all else fails, go to the state insurance department and ask to get a patient advocate.
If things go far enough, the case will likely be reviewed by an independent review board. The review board may get involved through an employer’s health insurance plan or through the state insurance regulatory board. In the meantime, also negotiate with the physician and work out a payment plan which stretches payments out over time and makes treatment more financially affordable.
Health Insurance Options If Laid Off Work or If You Have A Pre-Existing Condition
Joining a health insurance group plan that one’s employed spouse is already a member of is an option for health insurance coverage if one has no job. Or, thanks to Consolidation Omnibus Budget Reconciliation Act (COBRA) requirements, one could remain in the group health insurance policy provided by one’s employer for 18 months after the job was ended although companies with fewer than 20 workers might be exempt from having to provide this.
Having a pre-existing condition or having a condition which is not included in coverage means that it might be necessary to be a part of the state high risk health insurance pool. In addition to the state high risk pools, there is also now a national high risk coverage pool that one can join as a result of health reform law.
Also, healthcare such as medical tests and medical exams are available at Walgreens or other drug stores these days. Medical evaluation may be done by a nurse practitioner instead of a physician. However, the medical care is available. Also, going to a community health care center is an option because community healthcare centers in many urban areas provide free medical care for those without health insurance or those who have low income.
Loan protection insurance is sold to borrowers as security against unforeseen circumstances such as injury or redundancy. However, according to a BBC’s news report, “Crackdown on Misselling of PPI” (BBC News) customers are being sold PPIs inappropriately. In one case, a debt was written off due to the misselling of a loan with a PPI. This would indicate that customers must be especially wary when purchasing loans.
Guide to Getting a Cheap Loan
Finding cheap cover from compare sites and playing one against the other is a great way of obtaining cheap cover. However, loan insurance annexed to a loan with low APR can make it expensive. In fact, according to Money Saving Expert’s report, “Reclaim PPI Loan Insurance,” the cover may work out to be twice as costly as the cost of the loan itself. Furthermore, the Financial Services Authority (FSA) has issued heavy fines to loan companies for attaching PPIs to loans without customers’ notification.
With this in mind, the following has important relevance:
- The PPI is not compulsory with the loan. If the lender suggests otherwise or tries to coerce the customer in this way, this is deemed to be a misselling of the loan and should be reported to the FSA or the Financial Ombudsman (FOB).
- When purchasing a cheap loan, customers are within their rights to shop around for cheap cover too. An independent loan insurer will cut the cost of the cover drastically.
- The customer is paying for useless cover if it does not fit the circumstances. Redundancy insurance, for instance, is useless for a customer who is self employed. A miss selling of loan insurance in this way can be claimed back if the customer takes appropriate action against the loan company.
- Take extra vigilance for hidden fees.
The Cheapest Unsecured Loans
The consumer may consider dispensing with payment protection if the following does not apply:
- If the loan is secured
- If the loan is considerable
- If there are other debts
- Circumstances are unstable
Before taking out payment protection, address the following:
- Payment protection runs for a year. After this period, the cover no longer applies. Is the premium worth it?
- Again if the loan is small, the cost of the PPI premium may not be worth it.
- The consumer must work out the maximum payout and weigh this up against the cost of the loan.
- Is the consumer already covered in another policy? If so, the cover is unnecessary.
- Instead of paying the monthly costs of payment protection, the consumer may consider depositing the money in a high interest savings account. An instant access Cash ISA could be ideal for this purpose. It earns relatively high interest, is tax free and the money is available instantly.
- If the ISA is full, a regular savings account yields high interest on savings so long as the account holder regularly drip feeds funds into the account.
- If the unforeseen happens without cover, the lender may sometimes agree to defer or reduce payment.
Cheap Loans and Cover
Customers may save thousands by taking vigilance over the cost of payment protection on loans. Finding a cheaper quote from an independent insurer is a shrewd move, but the necessity of a PPI may be questioned if the risk factor of not having one is low.
Is Pet Insurance Worth the Money? Answer These Questions About Health Insurance for Pets Before Buying
Should a pet owner purchase pet health insurance? This is a question that should be considered carefully. Vets are now able to treat many more conditions in companion animals successfully, including feline cancer, and canine diabetes. However, these treatments come with a high price tag.
Statistics show that one out of every three pets will need some type of emergency pet care every year. Two out of every three companion animals will face a serious health problem sometime in their lives. Many pet owners believe that purchasing a pet health insurance policy is the best way to be prepared for unexpected veterinary emergencies. But is this really true?
Here are questions that should be answered before buying any kind of health insurance for pets.
Is Lifelong Pet Insurance a Good Idea?
Many people wonder if they should get pet insurance for a new puppy or kitten or wait until the animal is older. This is a good question.
Just like people, pets face many more health issues as they get older. This can make it very difficult to find pet health insurance for an older animal. Most companies won’t cover a companion animal who is older than nine years. If they do, the premiums will be very high.
Is the answer to buy pet insurance when the companion animal is younger? Maybe not. That $10-a-month premium for a kitten may increase as she gets older. How much will premiums increase? Can a certain premium be locked in until the pet is ten or twelve years old?
If she is treated for a certain condition, like feline diabetes, will this condition be considered a “pre-existing condition” when it comes time to renew the policy? If so, the company may refuse to insure her any longer, or may increase the premium substantially.
Also consider the cost of premiums over the pet’s lifetime. $15 a month comes to $180 a year. If the premium remains the same for ten years, the cost would be $1800, just for premiums. The premiums will probably increase if any claims are filed. Don’t forget about the co-pays and deductibles, too.
How Much is the Deductible? How Much Co-Pay is Required?
Every pet insurance plan has a deductible, which is the amount that the owner has to pay himself. Depending on the pet’s age, the deductible may be $50 or more for each procedure (not each visit). This can add up quickly if the animal requires several procedures.
The insurance company may also require that the pet owner co-pays ten to twenty percent of the vet bill.
Ask About Caps
The maximum amount an insurance company will pay per animal per year is called a cap. There may be a cap for each covered condition, plus an annual cap and a lifetime cap for each animal. Avoid nasty surprises by learning which caps apply to the pet, or its condition.
How Long Does It Take to be Reimbursed?
Be aware that the pet owner is expected to pay the vet at the time service is rendered. The pet owner fills out the insurance form and mails it in. It can take two to four weeks, or longer, to receive reimbursement.
Before buying a policy, ask how the reimbursement is calculated. The owner may be reimbursed for a certain percentage of the vet’s bill. Or the company may have a benefit schedule that lists what it will pay for each procedure. The company may only pay a certain percentage of this amount, not a percentage of what the bill actually was.
Always Read the Fine Print
Know ahead of time which conditions are covered, and which are excluded. Is there a waiting period before the insurance goes into effect? Does the owner get to choose which vet to use? Are prescriptions covered? What about emergency care?
Every insurance company is different, and each company offers many different plans. If a pet owner decides to invest in pet health insurance, it’s important to compare plans carefully, and to read the find print to find the best value for pet insurance.
Every day is a good day to start learning new ways to save money from that ever–loving saving money expert, Granny Ruby. She was always looking for new and better ways to save money on just about everything. Taking care of one’s family, especially their health care, is perhaps the most noble of all pursuits, and finding ways to do it cheaper was a life–long goal of Granny Ruby.
According to Hewitt Associates, a human resources consulting firm, the average worker’s out–of–pocket medical expenses fro 2017 will increase 10.1 percent to an average of $1,880. That means that in order to keep current levels of health care and health insurance, folks are going to have to increase overall income by 10 percent, or start cutting costs from an already strained budget. Here’s a few of Granny’s helpful tips for cutting medical and health care costs.
Save Money by Using Retail Clinics, not the ER
Prevention is always the best medicine, but there are times when a visit to the doctor or clinic is a necessity. For minor problems like a sore throat, flu shot, muscle sprain, or ear infection, try going to the local drug store or grocery store pharmacy. These days, most of these retail stores in–house care facilities are staffed with a nurse practitioner or physician’s assistant. There are several insurance companies that offer coverage for these retail care facilities.
These professional care givers are able to treat and diagnose most problems and they can offer treatment for a lot less than going to a doctor’s office. According to the Rand Corporation, a non–profit think tank, a visit to a local retail clinic can cost about a third less than going to an urgent care clinic or the family physician. Compare that with $570 for the average ER visit, according to the Rand study. Check with an the HR department at work, or with an agent or insurance representative for more details on specific insurance coverage.
Health Insurance Savings
It may be a good time to check all health insurance coverage limits and benefits. Getting the right amount of coverage and the right type of coverage is one of the best ways to save money. Some health insurance policies are made to appear like a great deal and may offer a low premium or deductible. Be careful and make sure all the details of the policy are adequate to cover any emergency or long–term health care issues.
Some health insurance policies that offer super low premiums or deductibles may only provide for less than $100,000 per accident or illness. If a person were to encounter a serious illness for which care might be months or even years, that small amount of coverage isn’t going to go very far. Someone’s going to get stuck with a lot of hospital, doctor, and medical bills and it won’t be the insurance company.
Granny would say that the best way to save money is to spend money wisely and get the most bang for a buck. In this case, buy a high–deductible health insurance policy with a minimum of $1 million coverage for each accident or illness. Also, make sure that all the policy coverage rules are understood clearly before signing anything. Different insurance companies have different rules for what is covered. Be sure to check with an agent or representative.
Check Medical Bills and Save Money
According to Medical Billing Advocates of America, as many as 80% of doctor and hospital bills contain some sort of error. Something as simple as a wrong billing code, wrong account number, or even incomplete information can cost the unwary consumer a great deal of money. These mistakes are so costly, a billing error discovery industry has sprung up in this country to find and recover these overcharges and errors in medical bills. Consumers can also get help with reviewing medical bills for free at the Patient Advocate Foundation at patientadvocate.org.
Mark Twain once said that the holy passion of friendship is so sweet and steady and loyal and enduring in nature that it will last through a whole lifetime, if not asked to lend money. Make a commitment today to start changing attitudes and misconceptions about money. Money is indeed a good thing if one learns to use it wisely.
According to Bloomberg News, the national unemployment rate rose to 8.9 percent in April. Because most U.S. residents get their insurance through their employers, this means that a large number of individuals must now pay for their own health coverage.
Individuals can sign up for COBRA, which allows them to stay on their employer’s health plans for up to 18 months after they lose their jobs. COBRA, though, can be costly. According to the North Carolina Institute for Medicine, the number of uninsured residents in the United States hit 52 million in January of 2016. That’s up from 46 million individuals who did not have health insurance coverage in 2014. A big reason for this is cost: Paying for health insurance is expensive.
Fortunately, there are ways that individuals can cut the costs of health insurance.
Shop Around for Health Insurance
Individuals can save on health insurance by shopping for different health plans. Individuals can research these plans at the Web home of the National Committee for Quality Assurance. Consumers can also work with independent insurance agents or brokers to find the best plan for them. These agents don’t work with a specific insurance company, and will instead search for the most affordable plans for their clients. Working with an agent can be especially important for individuals who have preexisting medical conditions.
Stay Healthy for the Best Prices
Consumers should refrain from smoking, taking drugs or abusing alcohol if they want to pay the lowest premiums. Policyholders who smoke, for instance, are viewed by insurance companies as bigger risks than those who don’t. That’s because smokers are far more likely to need intensive medical care during their lifetimes than are non-smokers.
This doesn’t mean, though, that consumers should try to hide any existing medical conditions or health problems from their potential insurers. Insurance companies will certainly discover when individuals try to hide health issues. Instead of trying to sneak these conditions past insurers, individuals should instead give out as much information about their medical conditions as possible. For instance, individuals with a history of high blood pressure should make sure to inform potential insurers that they have changed their diet and are now taking medication to keep their condition under control.
Don’t Forget to Look at Other Options
Consumers don’t always have to obtain their health insurance through a private insurer. Trade associations or alumni clubs often offer their own group insurance plans that may boast far lower rates. Labor unions might offer the same. Paying for health insurance is never going to be cheap. But with a little research, consumers can cut a significant amount of dollars from their insurance premiums.
Administrative Services Only Plans Save Money: ASO Group Health & Dental Benefits Shift Focus To Claims Incurred
As companies around the world look to save as much money as possible on their operations, employers are carefully evaluating employee benefit plan costs.
Group insurance benefits are typically subject to an annual renewal process.
At renewal, benefit plan managers have an opportunity to ensure that their insurance carrier is effectively providing essential employee benefits as economically as possible.
A popular option for saving clients money at renewal is the Administrative Services Only (ASO) plan.
Group ASO Plan Defined
ASO is now one of the fastest growing types of employee benefit arrangements. Under an ASO plan, employers are responsible for directly funding all claims that their employees incur. Plus, employers pay a fixed fee for administrative services like claim payment and management reporting. An insurance company or other financial institution usually provides those administrative services, but doesn’t collect any premiums where no insurance risk has been underwritten.
Health and dental benefits are most commonly covered under ASO plans. Self-insuring short-term and long-term disability benefits requires that employers set aside reserves to ensure that future claim payments are made even if coverage terminates. Larger employers fund ASO disability plans.
Fast-Growing ASO Plans
For the year ending December 31, 2008, Canada’s Great West Life Assurance Company garnered US$1.9 billion in self-funded premium equivalents under ASO contracts, up 8% from $1.8 billion in 2007. In contrast, Manulife Financial reported a 25% decrease from more traditional group insurance products in 2008. Competitor Sun Life Financial had a 7% slide in premiums for its more conservative portfolio of group insurance clients.
Costs That ASO Benefits Save
Under traditional experience-rated group insurance, employers pay a group premium that includes charges for claims, reserves, inflation factors, administrative fees, risk management and profit. Also included are sales commissions. The insurance company calculates group renewal premiums, looking at each group’s claims experience history but also adding rate adjustments and assumptions to improve profitability for the block of business to which the employer belongs.
In contrast, an Administrative Services Only plan limits client funding to actual paid claims plus a fixed fee for administrative charges. An ASO client saves the following group insurance charges:
- Claim reserves deposited with an insurance company
- Inflation factors
- Profit adjustment fees
- Risk management charges
- Sales commissions.
ASO Advantages Over Group Insurance Premium Renewals
The annual renewal negotiation for insured health and dental benefits is often painful, with the insurance company trying to win maximum rate gains at the expense of their clients. Tactics used include waiting until the last minute to force through excessive premium renewals before the client has a chance to respond intelligently.
Employers do have the option of taking their insured plans out to market for competitive bids, either directly or through a group benefits broker. But if repeated annually, employee benefits re-marketing can become expensive both in terms of time and money.
An ASO plan eliminates the need for the premium renewal process. With an ASO plan, the administrative services fee is fixed and charges are more directly linked to the actual claims that employees incur.
Claims Advantages Of ASO Benefits
Administrators provide their clients with detailed reports of claim payments, then help their clients focus on claims’ cost control strategies without having to worry about other insurance charges.
For example, an ASO plan enables the client to take away overused benefit components like anti-depression medication that might be standard coverage under an insurer’s package plan for companies of a certain size.
US Health Plans Involve Major Risks
Here’s an important note for American group policyholders contemplating a switch of their Major Medical plans to ASO.
Canadian provinces offer medical care. Thus, a major portion of the costs for highly expensive treatment like cancer chemotherapy is provided for under government plans. Therefore, Canadian companies are insulated from major medical costs should their employees require extensive surgery, transplants or other expensive treatment.
In contrast, an American company that self-insures the Major Medical benefit may have to pay millions of dollars for medical complications from a pregnancy especially if there are no limits on coverage.
Therefore, ASO plans in the U.S. usually are sold with stop-loss policies that require an insurance company to assume the risk when claims exceed a contractually specified dollar amount or percentage.