Healthy Returns

How the Web can help you find the right coverage

Between 1998 and 2000, health-care costs at Dave Maddock's five-person road construction equipment company jumped 100%. Maddock's insurance broker kept insisting there were no better options. But when the Bloomington (Ind.) entrepreneur did a little Web surfing last October, he stumbled upon, an online insurance broker in Sunnyvale, Calif. Within days, it helped him find a plan from Unicare similar to his old Blue Cross/Blue Shield Assn. plan, except for the cost: $350, compared with $800 a month. Maddock signed up--and replaced his human broker with a virtual one.

With health-care costs climbing at a double-digit rate, online brokerages are certainly worth a look. While they can't guarantee a discount, they can help keep your costs down by apprising you of all your options.

There are four leading Web sites (table), and they work essentially the same way. You punch in some demographic information about your employees--such as age, sex, and zip code. The software will then show you dozens of plans offered by carriers in your state, with the details tailored to your company. The side-by-side comparisons enable you to see how plans stack up on key variables such as premiums, co-payments, deductibles, and coverage for outpatient services.

On Darien (Ill.)-based Inc. (QUOT ), for example, a comparison of plans without an in-network deductible offered choices whose monthly costs ranged from $1,600 to $2,050. On eHealthinsurance, preferred provider organizations with similar monthly premiums had family out-of-pocket maximums between $4,000 and $9,000. "The analytical tools are what make the Net so useful, not just the quotes themselves," says Marian Mulkey, program officer with the California Healthcare Foundation. In some cases, eHealthinsurance allows you to fill out the application online, allowing you to cut the usual registration time in half.

One caveat: The sheer amount of information might be overwhelming to those not fluent in insurance jargon. Fortunately, if you get confused, the sites offer help through an 800 number. Even a virtual broker may need a bit of the human touch.

By Joshua Kendall

    Before it's here, it's on the Bloomberg Terminal.