Boca Benefits Consulting Group Inc.

BBCG is now listed on the Globaltrade.net “The marketplace for International Trade Services” web site: http://www.globaltrade.net/user/profile.html?user.id=223 . This site is similar to other business oriented social web sites. Please see our posts there.


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As our prior post indicated, BBCG is particpating in the AccessAmerica initiative in China sponsored by the U.S. Department of Commerce. The white paper “Accessing International Healthcare Insurance in the Global Economy” is now posted with a Chinese language synopsis at: http://www.buyusa.gov/china/zh/aa_resources.html .


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Following a sale of group healthcare to a group of diplomats in Beijing, China, BBCG has been posted as an insurance resource in a U.S. Department of Commerce sponsored program called AccessAmerica.  That program provides Chinese language translation of our services and provides a link on the embassy web site in Beijing. As part of that service BBCG was also asked to write a related white paper which is now posted there as well.

This is the direct link to the BBCG piece: http://www.buyusa.gov/china/zh/aa_listing.html?bsp_cat=84130000&bsp_id=32 . [Note: Chinese language browser module may be required for full functionality.]

This is the link to the directory in which it is posted (Insurance Services): http://www.buyusa.gov/china/zh/aa_directory.html

This is a link to a copy of the white paper (best viewed by downloading first via right mouse click and “Save Target As” function): http://bocabenefits.com/papers/intl_health_insurance.pdf .


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— Speaking As a Broker 

Twelve Critical Items to Consider 

1. When replacing one stop-loss carrier with another will there be any gap in coverage or significant difference in terms? If the rates and coverage seem too good to be true, there is always a reason. The fundamentals of stop-loss underwriting are the same for every carrier and normally only differences in policy terms or claims handling can allow for large premium and/or claim limit swings. At times carriers will enter into periods of higher than market risk acceptance. This should be a major red flag for employers.  Conversely, carriers which profess to have a “premium book of business” which allows below market underwriting should also be approached with equal caution. It is rarely true, and if so, will likely not be so for long.
2. Never make a carrier change until you have addressed all the potential gaps in coverage (i.e., run-in claims, actively at work requirements, carve-outs sometimes referred to as “lasers”, on-going large claims). The protection of your prior insured carrier’s run-out when you first shifted to self-insurance may be providing you with false comfort regarding the risk of stop-loss carrier change in subsequent years.
3. Know as much as possible about what is in the pipeline on the date of stop-loss carrier change. Don’t be shocked when a large six months old delayed hospital claim comes in to your claims payor the day after you change stop-loss carriers. If your new terms are only on a 15/12 basis (i.e., covering claims three months old but nothing prior to that), it will not be covered by either the prior carrier or the new one. If it is a million dollar heart transplant claim for an out of state dependent you did not know about, a visit to you corporate counsel will likely be next. Unfortunately, neither carrier has done anything wrong. Your broker’s E&O coverage may be a source of recovery. However, even there, the majority of brokers carry E&O policies with severe limits on self-insured activities.
4. Is the stop-loss carrier going to be a “flash in the pan” participant in the excess loss marketplace? Some carriers enter briefly for a quick cash infusion but have no intention of being a long-term player. Short-term carrier strategies mean they do not have to be nearly as customer conscious (i.e., with the plan sponsor and with brokers). They may be out of the business before their poor business practices catch up with them.
5. Is the first year offer no more than a means to gaining an initial foothold with large renewal rates to follow?
6. Don’t be taken in by immature claims to mature claims comparisons. First year renewals will always be big. However, if a carrier bought the business with first year rates, its subsequent first renewal will exceed even normal immature to mature transitions.
7. If virtually every other stop-loss carrier is shying away from a particular underwriting technique, a plan sponsor should be extra diligent in vetting the carrier who offers it.
8. If it is a two-year guarantee on claims limits, or on premium, a plan sponsor needs to ask why the carrier can afford to take on that risk when most other carriers won’t? What has been built into the premium structure or the claims limits over that two year period which makes the risk acceptable to this one underwriter? The answer is likely not favorable to the employer plan sponsor.
9. What is the nature of the carrier’s investment portfolio? If there are large holdings of marginal securities generating high but risky current yields, it may have later underwriting impact on an employer’s stop-loss renewal if those investments suddenly go south.
10. How much of the risk of its book of business does the carrier hold and how much is ceded to reinsurers? If it is a fronting company only (i.e., holds minimal risk internally) employers should be cautious.
11. What is the carrier’s existing loss ratio on its entire block of existing business? If it is eroding fast, the losses will be loaded into future underwriting on all its business.
12. Is the carrier admitted into the state where the employer’s plan situs has been established? If it is a surplus lines carrier (e.g., Lloyds and others) have all the downside risk issues been considered? Has the broker explained to the employer plan sponsor the fundamental differences between the surplus lines market and the admitted carrier market? They are substantial.

Please email us at stoploss@bocabenefits.com for assistance with your self-insured plan’s stop-loss needs.


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In 2008 Virtual Managed Care Organizations May Challenge
Two Decades of Dominance by the National Managed Care Companies. The
health care claims cost differential between managed care ASO carriers and
the best TPAs needs to be considered over three distinct time frames:
(1) short-term, (2) mid-term and (3) long-term.

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First Murchadhian Strategic Consultancy supplements the
employee benefits work of BBCG with financial planning and strategic consulting
services.

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A table of services which can be provided to clients directly by BBCG or via trusted select strategic partnerships.

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Boca Benefits Consulting Group, Inc. (BBCG) was formed by Robert W. Murphy in 1996. Its original situs was in Boca Raton, Florida. It was subsequently moved to Clearwater, Florida in 1999. It provides a comprehensive array of employee benefits, business protection and business continuity related services.

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BBCG, Inc. has been providing brokerage and consulting services to Florida employers
since its formation in 1996. Its principal consultant, Robert W. Murphy, has over 29 years of insurance carrier and consulting experience. He holds an advanced financial degree and four of the most prestigious financial services designations in the industry (REBC, ChFC, CLU, RHU). He has been a
panelist/speaker at a national conference on the future of healthcare and was a participant at a Harvard University executive program entitled “Skills for the New World of Health Care.”

Link to BBCG Web Site Home Page


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