THE CHANGE FROM GROUP TO INDIVIDUAL COVERAGE
The health insurance industry plays a vital role in the United States. Health insurance covers over 225 million Americans and continues to grow in changing market Each year there is an increase in the amount of Americans that become uninsured. According to the U.S. Census Bureau, August 2005, there were 45 million, uninsured Americans in 2004.

This has created a huge marketplace as more and more people strive to find a health insurance solution that makes sense to them. For many Americans the high cost associated with health insurance has made it unobtainable. The cost factor is number one reason why Americans are not protecting themselves with a product that is a necessity and integral part of their life. According to the National Health Interview Survey, 2004, National Center for Health Statistics, 53.3% of the U.S. population does not have health insurance coverage due to high associated cost. 26.9% lack health insurance due to a lost job or change in employment.

Many companies today are restructuring and heavily focusing on minimizing cost. In the past, the employer chose all the health insurance products for its employees and assumed the financial responsibility. This is rapidly changing, as costs are being passed to the individual. As a result many Americans are not provided with health insurance and it then becomes their responsibility to find something that is affordable and provides the coverage they need. 14.1% do not have it because their employer did not offer insurance or the insurance company refused.
This trend will continue as the industry continues to become more retail oriented. According to the McKinsey Quarterly from March 2007, “by 2011, the fate of $550 billion to $600 billion of premiums will be in the hands of INDIVIDUAL DECISION MAKERS not employers or the government”. 10% of the people did not have health insurance because their Medicaid benefits stopped. 6.2% were ineligible do to their age or leaving school, 7.8% were affected due to change in marital status or death of a parent.

The health insurance industry is going to be explosive as it evolves to become primarily centered on the individual. There will be several types of different sales channels that will evolve from a retail perspective to capture this emerging health insurance business. According to the McKinsey Quarterly from March 2007, these channels include 1) Direct- response channels, which would include such things as call centers, internet, direct mail, and television commercials. 2) Retail channels, 3) Affinity-marketing relationships, 4) Partnerships with financial institutions and 5) Work sites.

According to the National Health Interview Survey, 2004, National Center for Health Statistics, the top ten largest health insurance companies included UnitedHealth Group, WellPoint, Inc Group, Aetna, Humana, Inc, American Family Corp, CIGNA Health Group, Highmark Inc, Independence Blue Cross, HCSC Group, and Blue Cross Blue Shield of Michigan Group. UnitedHealth Group was number one writing over $35 million in direct premiums.

BENEFITS DYNAMICS is looking to capture a significant percentage of the health insurance market. This will be accomplished through its Direct- Response Retail channel. The company sells health and life insurance products throughout the United States and will offer a multitude of product offerings including the top health insurance carries such as United Health Care (Golden Rule), Aetna, Humana, and Assurant

DENTAL INSURANCE- Individual versus group plans.
Traditionally, Dental Insurance (not discount plans) was only obtainable from an employer based group dental insurance benefit plan. The rationale was simple- the more people in the group plan the less “adverse selection” the insurance company would experience. That is, some of the employees would not need as much dental repair as others, allowing the premiums collected to exceed the costs of the dental care. “Direct” coverage to individuals and their families was not obtainable. This has changed, with E Benefits Direct now offering two dental insurance plans to be sold through its call centers which combined, will offer coverage throughout the United States. One is a DMO (a “dental maintenance organization”) where the insured receives care from a participating dentist “in network” only. Thousands of dentists conveniently located near the insured’s home are participating in the plan. This plan is from Assurant The other dental plan is an “indemnity” plan (from “Synestra”) . This allows the insured to obtain dental services from any dentist with reimbursement obtained from the insurance company, often paid direct to the dentist.

LIFE INSURANCE- Individual
While many American have group term life insurance from their employer, many more need individual life insurance that is not dependent on their keeping their jobs and the Group life insurance plan associated with their job. Therefore, BENEFITS DYNAMICS will be offering life insurance with online applications. This will allow the policy holder to assure that their mortgage will be paid, that income will support their spouse and children, that children will be able to go to college etc, if they should die prematurely.

Life Insurance provides future financial security for individuals and families. These include permanent and term life insurance products. Term life insurance provides a death benefit to beneficiaries for a specified period of time. This provides financial protection at affordable pricing. Permanent life insurance provides long-term financial protection, a fixed death benefit and a cash value that the policyholder can borrow against.

Life insurance policies continue to play a critical role in the life insurance business. Policies are sold to individuals and groups to provide financial protection. The life insurance industry has been experiencing continued growth and market size has experienced an increase in their net premiums by 3.5% in value in 2005. There was a total of 552.7 billion in total net premiums for 2005. It is projected that the United States Life Insurance market will reach $661 billion in value. In 2004, according to the Insurance Information Institute, National Association of Insurance Commissioners, traditional life insurance represents 25.6% of the market by value. The Compound annual growth rate between 2001-2005 was 3.6%.

The life insurance products being sold are primarily permanent life insurance policies, however term life insurance policies half been the choice of half of the individual life insurance policies being purchased today. Term policies have become a very important part of the business and have grown in popularity because it provides a death benefit over a short period of time. The premiums on these types of policies are less expensive than permanent life insurance. This is important because it provides an affordable solution.

The company will market and sell a variety of life insurance products including AIG American General, William Penn, Colorado Bankers and Fidelity Life Association.

LIFE INSURANCE through Financial Professionals
BENEFITS DYNAMICS is also introducing to financial service professionals, an online System to quote and sell life insurance products to their clients. Using these “alternate distribution channels” BENEFITS DYNAMICS will be able to receive high commission income through licensed financial service professionals who prior to this had not incorporated the sale of life insurance in their business. BENEFITS DYNAMICS has begun to sponsor these highly qualified individuals for their training leading to their licensing. Traning in sales techniques will also be provided.

The online system is a highly simplified quote and prequalification system, where the financial services professional never has to personally see the client, with all medical underwriting provided by third parties contracted for this purpose.

MEDICAL DISCOUNT CARDS
The Medical Discount industry serves a major importance in the United States by providing an alternative healthcare solution to individuals and families who are uninsured because of affordability or they cannot qualify for major medical health insurance. According to the U.S. Census Bureau, August 2005, there were 45 million, uninsured Americans in 2004. Discount health and services programs are not insurance and are not designed to replace it.

Due to a healthcare industry that is constantly changing more and more Americans will seek out other healthcare alternatives as they may have been declined due to pre-existing condition, or simply cannot afford the high cost of health insurance. Discount health programs including dental, vision, prescription drug program, and lab services serve as a great addition to someone who already has a major medical insurance plan. For example, often times, major medical insurance policies do not come with dental. A dental discount program would compliment existing health insurance and provide a more comprehensive healthcare solution.

According to the Consumer Health Alliance (CHA), “for individuals and families without insurance, discount healthcare programs offer substantial savings on healthcare services such as doctor visits and on everyday health related expenses including prescription drugs, eyeglasses and dental care they might otherwise not afford.”

It is important that when choosing a medical discount program, the consumer does research to ensure that the company is reputable. There has been a positive compliance movement in the industry as many states require approval to offer medical discount plans. In Florida, for example, as of April 2, 2007, there are currently forty six discount medical plan organizations (DMPO’s) that have been filed and approved according the Florida Department of Financial Services.

More and more Americans are forced to find alternative healthcare solutions because of affordability issues or a health condition that prohibits a consumer from obtaining major medical insurance. As a result, Discount healthcare programs and memberships are growing at a very high rate. There is much competition in the discount healthcare market, however due to recent compliance changes several companies have left the marketplace. In Florida, DMPO’s include, Capella Group, Cinergy Health, Careington International Corporation and International Association of Benefits.