Franchise Insurance : New Sources of ValueOctober 2009 By Erik Cagle
The plan, which went into effect on January 1, has been roundly applauded by Allegra participants. The package offers three preferred provider organization (PPO) choices. Members aren't discriminated against insurance-wise because of age and sex, and there's no exclusionary stipulation regarding pre-existing conditions.
Savings and benefits advantages vary from state to state. Some companies joined just to be a part of a greater participatory group and, hopefully, to avoid crippling future increases. But a Pennsylvania facility saw a savings of $30,000 for 2009, a major boon for a shop that posts $1.5 million in sales. And a New Jersey plant welcomed the change after seeing its rates balloon an astonishing 51 percent.
For some shops, joining the BCBS Michigan fold wasn't feasible. "We found a couple of states where the rates just weren't competitive at all," Gerhardt notes.
Outside of facilitating the policy, Allegra Network's corporate structure has virtually nothing to do with the insurance, outside of endorsing the plan. The plans are not billed through Allegra corporate; individual contracts are drawn up between each facility's owner and BCBS.
Future rate increases should be competitive with most alternative plans, since Allegra enjoys a solid participatory base. There's a chance the company could go the self-insured route once participation reaches 1,000 members but, for now, Gerhardt is concentrating on promoting the value-add to prospective new Allegra Network facility owners. As a point of differentiation, he sees the group insurance as another tool in the Allegra Network franchisee belt, one that is no small consideration in a depressed economy. PI