for
insurance expertise of independent agents
Asbury Park Press (March 7, 2001)
by Charles T. Gartlan
Thanks to health care costs rising at twice the rate
of inflation, the average health insurance premium for an employee
in Monmouth or Ocean County – and the rest of the state – now exceeds
$5,000 a year. As an employer, if you expect to attract and retain
quality personnel, you'd better be willing to pay a large portion
of the health premium for every employee and in many cases, for
their family members.
There's got to be a better way, you think. Then you
hear the radio ad for that on-line insurance service that promises,
"You'll never deal with another commissioned salesman." Cut out
the middleman and save some significant dollars, right?
Probably not. One of the misnomers resulting from the Internet
hype is that individuals or employers pay a higher premium when
purchasing insurance through an agent or broker rather than on the
Web or directly from an insurance carrier. With virtually all small
group and individual health policies in New Jersey, customers pay
the same amount either way. Agents and brokers are compensated through
commissions from insurers.
Still, for many young and healthy individuals,
buying insurance on-line could be a legitimate time saver. Many
web sites have been established that offer individual coverage,
and more recently, small employer coverage. Just log on, answer
a few basic questions, select the type of insurance plan desired,
enter census data and "submit." In a few days, the application will
arrive in the mail, you'll sign a few papers, send a check, and
presto: You, your family, and perhaps your employees and their family
members, will be covered. Plus, the state of New Jersey has
made it easier by standardizing the provisions of health plans for
both individuals and employers with 2 to 50 employees.
But for most employers, many of whom have children and
bear responsibility for covering their employees, it's a whole different
ballgame with lots of tough choices. These include whether to select
an HMO, point-of-service plan, preferred provider organization or
indemnity plan; which managed care network to select; whether to
add a prescription drug plan; whether to include ancillary benefits
such as life, long-term disability, dental and vision coverage;
should the employer establish a Section 125 plan; and what the co-payment
and deductible should be.
Before making these decisions, you need to do a lot
of research, or put your faith in the hands of a stranger at the
other end of the telephone or e-mail. Then, when it's time to get
a major claim paid, you need to depend on another faceless individual,
again via telephone or e-mail, to act on your behalf to secure reimbursement
for a medical service that could cost many thousands of dollars.
That's why most individuals and employers depend on
the independent insurance agent or broker, knowledgeable about the
subtleties of medical coverage and accountable only to his or her
client, and not to any insurance company. The broker's job is to
evaluate the needs of the individual, his family and company and
put together a health insurance plan that balances the needs of
employees with the firm's bottom line. When someone has a claim,
the broker will act as the liaison with the insurance company to
help ensure proper reimbursement. Moreover, he or she will be available
to answer questions and offer advice on issues such as adding or
subtracting participants; COBRA, disability and state continuation
coverage, state and federal laws, and the best renewal options.
So these are the options -- the convenience of the Web
versus the knowledgeable insurance broker who represents your needs
and is probably your best weapon to control costs. Those who don't
want to discuss their needs with an insurance broker will find more
opportunities to shop for coverage on-line, as health insurance
web sites proliferate. Others will continue to seek the professionalism
of health insurance agents and brokers.
Charles T. Gartlan, an employee benefits specialist
in Toms River, is vice president of the New Jersey Association of
Health Underwriters, based in Springfield
Used with permission of the Asbury Park Press. Copyright
Asbury Park Press 2001. All rights reserved.
