Entries from January 2010 ↓

Small business owners are constantly looking for ways to cut their costs and when it comes to insuring own employees there are certain alternatives to traditional group plans that may be quite costly for small enterprises. The two most common alternatives are purchasing alliances and association plans. The first are generally nonprofit organizations with private ownership that connect more small enterprises for purchasing group plans as a whole.

The concept behind this is quite obvious: the more the better. Because there are many people involved in insurance purchasing pools they usually have better rates and stronger negotiation abilities. There are pools allowing individuals to join, however in most cases they serve only small enterprises with 2 to 50 workers. Such pools have more attractive rates and premiums for their members if compared to typical group plans because the total number of underwriters can sometimes be of a big international corporation. So yes, size does matter.

Insurance purchasing alliances usually involve three parties:

1. Alliance company. Purchasing alliances are usually private companies by the form of ownership, which acts in the interest of smaller enterprises participating in the pool. The company is responsible for rules and regulations, requirements for new members and their eligibility. It is also the party responsible for negotiation the rates and premiums with the insurance provider. Quite often a local state agency or chamber of commerce works as an alliance company.

2. Health insurance providers. The alliance companies contact insurance companies for providing their members with coverage. Sometimes the company will contact several insurance providers to offer their pool members wider selection of plans and better coverage rates. Quite often you can find HMOs, PPOs, and POSs with the same alliance company but provided by numerous insurers.

3. Administrator company. This party usually deals with routine management duties and is often a company specialized in health care administration. It is usually the company that the members get all the services and instructions from. Continue reading →

The easiest thing to say in the world right now is that some US states are suffering more than others in the recession. The national media rightly focus on the headline figures showing the total numbers of unemployed, the foreclosure rate, and so on. This can be somewhat deceiving because it hides the fact that some states are actually turning in statistics very different from the national average. In Michigan, for example, the unemployment rate stands at 15.3%. The government estimates that, by the end of 2009, some 310,000 jobs will have disappeared with no sign of any consistent move for businesses to begin rehiring. That’s why Michigan has sponsored a tax rebate for small businesses – the majority having been unprofitable for the last year – and is extending a tax credit to home buyers to help meet their mortgage obligations – Michigan is ranked 8th in the national foreclosure rank. Not surprisingly, Michigan is facing a budget deficit right now and, with the cost of the tax rebate and credits extending into 2010, the deficit can only grow worse. Continue reading →