Not all industries are treated equally when it comes to health insurance. Actuaries review data and determine across the board that certain industries are higher risk. You could argue that big carriers discriminate against those industries.
What that means is a load is applied to the pure premium amount effectively increasing rates. In this market with already high renewal rates the industry load can be hefty. For example, we've recently seen loads on nursing homes of around 14% and similar for automobile dealers. That could mean a lot of dollars out the door to traditional health insurance carriers.
The impression to date has been that there are no other options outside of the big carriers. That if you are restaurants, franchises, nursing homes, auto dealers you have to swallow a bitter renewal. Happily there are carriers who have a different perspective... and as a result we are able to get a substantial ROI for those very companies used to being "bad risk".
In my opinion, the big carriers or BUCAs (Blue Cross, UnitedHealthcare, Cigna, Aetna) are missing out on some good opportunities. Although actuaries have determined some industries to automatically be higher risk there are always exceptions to the rule. We are able to help a client determine if they might be the exception.
Let me tell you about what we call "Evergreen Companies."
These are in the very industries we have been talking about who feel they have not had a fair shake. They share three traits.
1) Their employees must show up to work
2) They are always on their feet and constantly moving
3) They are replacing older workers with younger workers, or the average age doesn't change all that much
Think about restaurants: The staff tends to be young and they spend their work hours on their feet. The carriers see factors like low participation. For example, imagine a staff totaling 200 with 80 of them full time (eligible for benefits) and only 30 people take the group insurance plan. In insurance we call those numbers "adverse selection," meaning a big disparity in the ratio between employees and insureds. In such instances it is typically assumed to be a situation in which only the unhealthy have taken the policy.
Seen in another light this same situation could actually be a good risk. The staff is young (assumed healthy) and they tend to have higher than average turn over -- meaning for the 6 months or so that an employee is on the plan it is likely they will not need to use the plan benefits. In other words, 6 months of collected premium that will not need to be spent. Would you call that good business? Still it is something to consider case by case and the BUCAs, with their big numbers, take a broader industry based view.
You might be asking : What other choice do we have?
Our answer is simple: there are plenty of other opportunities out there, other carriers that tell us "We want those companies!" We work with our partners to have a more narrow focus. We drill down looking at the specifics of each group's claims history and trends.
The industry is changing, bringing out alternatives to the traditional carriers, but you might not have heard about these options. It is often these very Evergreen Companies, the ones that feel under-served by the big carriers, that we are able to help the most.
Do you identify with the traits and circumstances I've described? Our solutions might seem a bit out of the box, so we would love to present them to you to see if we can help you too.
Do you feel your company fits the Evergreen model or close to it?
Are you a: Restaurant Group, Franchise, Hotel/Hospitality, Construction, Retail, Fitness, Nursing Home, Engineering, Waste Management, Manufacturing, Electrical/HVAC, Warehouses, Moving, Food Services, Suppliers, or have a high turnover and/or low participation, therefore feel you haven't been given a descent opportunity by the BUCAs?
Well I say this, the time is now to explore if your opportunity cost could be over!
As my friend Mike L. says over a cold martini: "Stop the madness! It's only a phone call."