It is a common tendency with all small business owners to look around and continuously search for efficient ways that can help them cut on the business costs. So when it comes insuring the employees of the company, there are a few variant options available out there other than the traditional group health insurance plans. After all, these policies can be a little too costly for the small business houses that have a limited amount of liquid cash to spend. One of the most common and popular options available in this context are purchase of alliances.
Purchasing alliances which are also known as purchasing pools: These organizations are non profit in nature and are run on the basis of private ownership. This way a number of small business organizations are networked while buying the group health insurance plans together. The driving idea behind these options is the fact that the more you gather, it is always the better. As in such cases a whole lot of people are involved in the pool where they purchase the insurances and the negotiation is a lot more effective, the final rates are managed at a far more affordable state as well.
Group Health Insurance alliances in general involve three distinct parties, the alliance company, the administrator company and the health insurance providers.
The alliance company is a private company by the very form of its ownership. This company works in the favor of the interests of the small business organizations who take part in the pool for buying the group health care coverage plan. The alliance company is actually supposed to take care of all the rules and regulations and fill in the requirements for new members and decide on their eligibility as well. It’s also to a large extent responsible for negotiating the premiums and the rates with the insurance company that will be providing the coverage. Most commonly it is a local chamber of commerce of the local state agency that takes up the responsibility as an alliance company.
Coming to the administrator company this is a unit that is supposed to deal with the regular management duties. This is generally a company that specializes in health care administration and it is this company that gives all the directions and service instructions to the member companies.
The third category belongs to the health insurance providers who are provided by the insurance companies to the members for providing the coverage. Often these companies might contact a number of other insurance providers who may be asked to put in their offers for the pool members. This way the members are given the chance to choose from a wider range of coverage rates and plans.
The health insurance purchasing alliances are generally present in most of the states in the US, precisely where the state law allows these kinds of practices. So in case you are planning to buy any such coverage, something you need to do is first check out whether there are any such organizations in your area. You might even call in at your local Chamber of Commerce to check out if there is any valuable information that might come in handy.