Small-business health insurance at a glance
State Carrier Counties Eligibility
established, have broad networks and are
well known in a particular state. We look at
who’s competitive and financially strong.
After researching and selecting a leading carrier, both sides work together to see if they
can create an insurance plan that will meet
Costco’s standards for value.
CC: How does Costco work with carriers
to create an insurance plan and control
rate increases?
California PacifiCare
1-866-235-5300
Statewide
Must be an Executive Member
and have a business with two
or more employees
Nevada NevadaCare, Inc.
1-800-568-5055
Oregon Health Net Health
Plan of Oregon, Inc.
1-888-242-5802
Clark, Nye,
portions of Washoe
Statewide
Must be an Executive Member
and have a business with two
or more employees
Must be an Executive Member
and have a business with two
or more employees
Washington Health Net Life In all counties but the following: Must be an Executive Member
Insurance Co. Pacific, Wahkiakum, Cowlitz, Clark, and be self-employed or have a
1-888-974-0500 Skamania, Klickitat and Asotin business with one or more
employees
Health-care-plan group eligibility may be dependent on specific state underwriting guidelines, which may include some industry limitations. Other terms
and conditions may apply. For more information, visit costco.com or contact the carrier. To upgrade to an Executive Membership, call 1-800-220-6000.
DF: Costco’s goal is to get the most benefits
for the lowest price. Not only should the plan
be affordable, it should also have basic components such as preventive care. All of our
small-business health insurance plans have a
deductible, from $500 to $1,500, to maintain
affordability. They all also include coverage
for office visits, alternative care and prescription medicine. We take apart an insurance
plan the way other Costco buyers take apart a
product to know the material, the ingredients,
and how it works.
While Costco cannot control increases in
the cost of health-care services, we do have
the ability to negotiate on behalf of our members. That is something a small-business
owner is unable to do. We have quarterly
meetings with carriers in which we review all
aspects of the program such as sales, financial
statements, administrative fees and service
standards. We look at how the insurers are
doing, their profit goals, competition and
pricing trends in the industry.
After looking at all of that information,
we ask what can be done to minimize any
increase. We make sure that the increase is
absolutely warranted. If there’s a rate increase,
it’s because it is necessary to cover higher
health-care costs. It’s not because the carrier is
seeking a higher profit margin.
CC: Is customer service sacrificed in
exchange for good coverage?
DF: No. Costco’s health insurance program
has a dedicated call center, which must
adhere to strict service standards. Costco’s
program also offers, in most states, online
quoting and online servicing, such as adding
or deleting employees or dependents. The
use of electronic funds transfer also speeds
and simplifies the process of paying monthly
premiums. In true Costco fashion, we’re trying to simplify the process and give the best
value. IC
NOVEMBER 2004 • Inside Costco 9
