Blue Shield’s Bag of Tricks

Health insurance is a crazy game that few people really understand. Just when you think you have it figured out, they change the rules. Health insurance companies like Blue Shield have two main problems:

- Rapidly increasing cost of benefits by the medical industry makes it hard to keep the premium rates current with the increasing cost of medical claims.

- As their insured’s age, their claims surpass the premiums charged.

To solve these two problems, Blue Shield resorts to these solutions:

Negotiate aggressively:

Every two years, contracts are renegotiated with the health care providers as to the maximum they can be reimbursed for each medical procedure.

For example, my original bill for a kidney stone surgery was $42,000. After Blue Shield applied their contractually agreed discounts, my bill was cut to only $5,000.

Raise rates:

Even though insurance companies fight hard to contain costs, it’s a losing battle. They eventually must raise the premium rates of each plan when it becomes unprofitable.

New products:

Every 6-12 months, insurance companies change the plans available with new benefits, deductible options and rates to new applicants that they think will make them a profit.

Close old plans when they become unprofitable:

- When you first start your policy you will be in the peak of good health so you will get the most current plan that has been designed by Blue Shield to make a profit. You will be grouped together with others in good health to form what is called a “pool” of insured’s.

- As your pool ages, the claims experience will increase and the profitability will diminish to the point of unprofitability for the entire pool.

- At this point, the rates for the entire pool will be increased.

- At this point, Blue Shield may establish lower rates within the same pool for those who are in better health. This is called “tier rating” and it is normally in five different levels.

- When rates start to increase, the members who are still in good health will begin to leave the pool for other health insurance solutions.

- This exodus of the good risks from the pool accentuates the loss experience and the unprofitability of the pool. Thus the rates begin to accelerate rapidly.

When this happens to your pool, there are things you can do to avoid paying the increased rates. If you are in good health, you can apply for one of the new plans that have lower rates. Or you can apply for a change to a lower tier premium rate for your present plan. Another option is to change your deductible and/or drop some of the coverage. I saved $4,800 per year by dropping some coverage and raising my deductible from $750 to $2,000

If you are in poor health, you can apply for a change to a lower tier rate level premium for your present plan. Remember- you have nothing to lose by trying and as your health improves, you may be accepted into a lower tier level. Call us- this service is free.

If you do not re-apply to prove you are healthy enough to change tiers, you are stuck. Most people do not know they can transfer to get a better deal. Allied Brokers can do this for you at NO cost! Don’t give up hope- call us! We are here to help you balance cost and value within this tumultuous health insurance marketplace.

Visit our website at http://www.alliedbrokers.com/ for information about all the types of insurance we offer. Or call 1-888-505-7988 for a free rate quote.

Protect Your Family Jewels

Does your homeowner’s policy automatically cover your jewelry and watches if they are stolen? Sure, up to $1,000- maximum. Is your engagement ring covered if the diamond falls out of the setting and is lost forever? Nope. The most common uncovered loss we see is theft of jewelry and watches.

Most people think that expensive personal possessions, such as jewelry, are covered under their general home owner’s insurance policy. The truth is that insurance companies set low limits on the kind of possessions they know will be expensive to replace, such as Rolexes, tennis bracelets, Super Bowl rings and your grandmother’s pearls.

So what do you do? Protect yourself by adding a jewelry rider to your home, condo or renters insurance policy. It’s a bargain- only $150 per year per $10,000 of coverage. One type is scheduled coverage, which lists each item individually with an appraisal, receipt or a prior insurance policy list. Or you can choose blanket coverage if you have numerous items of lesser value and don’t want to hassle with lists and appraisals.

Due to the volatility of silver, gold and diamond prices, it’s a good idea to have your most precious swag re-appraised every 5 to 7 years. We can recommend a jeweler who can do this for you inexpensively.

To find the right policy for your valuables, call Chris Falcon at Allied Brokers. Chris specializes in personal insurance lines such as home, auto, umbrella, fire and casualty. His in-depth knowledge and years of industry experience will help you protect the things you cannot afford to lose.Visit our website at http://www.alliedbrokers.com/ for information about all the types of  insurance we offer. Or call 1-888-505-7988 for a free rate quote.

Employers Beware - New Laws for 2012

Governor Brown recently signed into law state legislation that directly impacts business owners with employees. Many of these laws will require revisions to employee handbooks, policies and procedures. In addition, several of the laws that expand leave rights and focus on wage and hour practices are sure to lead to an increase in claims. Here are some highlights:

1. Written commission agreements are now mandated by state law: An employer must now provide a written commission plan fully explaining how commissions are calculated and paid.
2. Enhanced penalties for wage theft prevention: Basically, employees get more time to collect wage judgments and penalties from employers and employers pay higher fines for failing to pay.
3. Extended pregnancy disability leave: Employers are now required to maintain and pay group health coverage for an employee on pregnancy disability leave- up to four months maximum.
4. No routine consumer credit checks: Employers and prospective employers are prohibited from obtaining consumer credit reports unless the person has or will have a position in finance, management or law enforcement, among others. Check the Consumer Credit Reporting Agencies Act for details.
5. Huge fines for willful misclassification of independent contractor: Don’t even think about trying to avoid employee status by calling someone an independent contractor- you can be fined up to $25,000.
6. Paid organ and bone marrow donor leave: Employers are now required to grant up to 30 paid business days for an employee who donates an organ and up to 5 days for bone marrow. Employers can require employees to use their vacation and sick leave, but if none has been accrued, the employer must grant the leave with pay.
7. Out-of-state Workers’ Compensation Coverage: California employers no longer have to buy a separate workers’ comp. policy to cover employees who occasionally work in another state. The State Compensation Insurance Fund will now cover injuries that trigger a workers’ comp. liability outside of California.

Information for this article was provided courtesy of Alan Parker at the Weintraub, Genshlea, Chediak Law Corporation: 916 558-6041

To know learn more about business insurance that meets your specific needs, contact Mimi Watson at Allied Brokers. Mimi, our Commercial Line Manager, works with a variety of businesses. In her nine years at Allied Brokers, Mimi has gained a wealth of experience and is exceptionally knowledgeable about
compliance issues and Workers’ Compensation regulations.

Visit our website: http://www.alliedbrokers.com/ for information on the services and insurance policies
we offer. Call 1-888-505-7988 (toll free) for a free rate quote.