“When the premie baby was not going to be covered, I asked if they could pay the claim. They responded, ‘No, it would bankrupt us.’”
We met repeatedly with a client out of Indiana that had 90 people to offer help; to bring a warning. We could have decreased their rates by 10% and put $200k in the bank. They are currently self-funded and this is their story:
They were already self-funded when we met them.
And the thing that everyone talks about in self-funded circles, happened.
They had a million-dollar baby. One of their staff had a premie and the baby had ongoing medical issues. Unlike some organizations, they had reinsurance, and they easily hit their $60,000 or 70,000. spec. So far, no problem. The reinsurance worked as advertised.
Unfortunately, when it came time to renew their reinsurance, the reinsurer insisted on either dropping the baby from the reinsurance policy, or accepting a $972,000 spec before the reinsurance kicked in. Just for the baby. Everyone else would stay at the $60,000 or 70,000 spec. The alternative was such a high rate-up that they simply couldn’t consider it.
The baby easily cost more than the reinsurance spec the following year. Fortunately for this organization, (as they were self-funded), the father of the baby worked elsewhere and had employer health insurance. The family was able to move the baby in the first 30 days to the fathers’ health insurance plan. And the agency dodged a huge bullet. I asked them “What if?” and they honestly told me that if they had to pay for the baby, it would have wiped them out. They were responsible.
Still, they decided to stay in that same self-funded plan (sans baby), without any better protection, when we could have saved them money, lowered everyone’s rates and helped them put $200,000 in the bank the following year.
We would have liked to at least help them restructure their self-funded plan and help them manage it since they had a U.S. (and not an international) TPA and were missing out on a lot of discounts they could have received for doctors and hospital claims overseas, and clearly they were one accident, one issue away from another big problem. And the agency and their people’s lives were at stake.
Are there still international organizations out there like this? Non-profits and charitable groups with families overseas selflessly serving and hoping nothing bad happens?
Unfortunately, there still are, and this is our warning. Please get help from a reputable broker, like Good Neighbor. We can help your international organization or non-profit have good coverage that will protect your employees.