Demand Studios Health Insurance – Objective Overview of FlexShield Benefits

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on November 20, 2009 in Freelance Writing Business
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You may have recently heard about a Demand Studios health insurance program (a limited benefit medical program). Since Demand Media is the first content mill to offer a health care benefit to freelancers, we are taking a break from normal posting to give you some information about the plan. Pictures below are screen shots from the final information packet available on the Demand Studios website. Click on the pictures to see larger versions or visit the info packet and review the page numbers (cited below) to learn more about the Demand Studios health insurance program.

Demand Studios Health Insurance Plan Highlights (From their Website):

  • No deductible or co-pays
  • Guaranteed acceptance: There are no medical tests or requirements to disclose ailments or family history, etc.
  • Pre-existing conditions are covered. The only exception is if you know you are pregnant, you cannot join the plan for that purpose. (Other than in California where there is no such requirement).

Re: Deductibles and co-pays- While the Demand Studios health insurance plan has no deductibles or co-pays, it does have out-of-pocket costs and it also does not offer the same limits as a traditional health insurance plan. In addition, any cost over the provided benefit will need to be paid by the patient:

Excerpt from page 4 - Note limits and amounts covered per plan option

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Re: Pre-existing conditions- Per Demand Studios health insurance plan documents linked above, pre-existing conditions requiring critical illness care are not covered for 12 months:

From page 3


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Demand Studios Health Insurance - Pros

  • With this program, participants will visit a network of physicians who have agreed to provide discounted services to members. While the cost of your care may still exceed the benefit paid by the program, your total cost could amount to less than it would without the negotiated discount. Tip: Comprehensive health insurance plans generally offer negotiated rates (or usual and customary rate) when you visit in-network providers so that your expenses are limited even if you have to pay a coinsurance rate. If possible, speak with a local agent and find out if you can compare the negotiated rates of a comprehensive health insurance plan and the Flex Benefit Program. Be sure to factor in the co-pays or deductibles in the health insurance plan as well as the visit maximums in the Flex Benefit Program.
  • The program includes vision benefits.
  • The program includes dental discounts.
  • The program includes prescription discounts. Tip: Check your local Publix, Wal-Mart or other pharmacy and find out what their prescriptions costs are for those you take regularly.
  • You have access to a 24/7 nurse hotline.

Demand Studios Health Insurance - Cons

  • The Beech Street PPO network may not have your healthcare providers or local hospitals in-network. Tip: Visit the Beech Street website to find out.
  • The Demand Studios health insurance plan maximums may not cover the total cost of any doctor visit or procedure.Tip: Call your local Beechtree network doctor and find out if the doctor visit costs as much or less than the maximum benefit ($50-$75 depending on the plan you choose, see page 4). You may be able to do this for other services as well to help determine the value of the plan to you.
  • There are no plan maximums, which means there is no cap to the amount you could spend out-of-pocket. Tip: Traditional health insurance plans generally offer out-of-pocket maximums. A plan with a deductible of $5,000 may seem high but if you check with your local agent, you can compare the out-of-pocket expenses and determine whether you actually have less at risk with a traditional health insurance plan and a deductible than you do with the FlexShield Benefit Program.
  • The insurance benefit per prescription ($5, $10 or $15 depending on your plan) along with the prescription discount may not provide a substantial prescription savings. Also, participants with pre-existing conditions and a large number of prescriptions may find the coverage too limited. Tip: Check your local Publix, Wal-Mart or other pharmacy and find out what their prescriptions costs are for those you take regularly.
  • The Critical illness coverage is once per lifetime.
  • The Demand Studios health insurance option is not available to all writers working for the company. A content threshold must be met during a consecutive three-month period in order to determine eligibility.

The Concerns

Concerns you may want to address with an independent agent and IPS before you terminate any existing coverage for this Demand Studios health insurance plan:

  • This program may not meet minimum creditable coverage standards in states like Massachusetts that require health coverage.
  • In order to avoid pre-existing conditions waiting periods in group plans, you must have continued creditable coverage with no gaps of more than 63 days. If you give up your existing individual or group health insurance for this program and you or your spouse get a new job and request coverage under the group plan, your pre-existing conditions could be exempt for 12-18 months because you did not keep creditable coverage.
  • If you give up COBRA coverage for this program, you will not be able to reinstate COBRA.
  • If you leave a health insurance plan in favor of this program, you may not be protected under HIPAA.
  • This program may not be as portable as an individual health insurance policy and offers no COBRA if you stop writing for Demand Studios (although there is no indication that this would be grounds for termination).

The Fine Print

End Notes

Before you make any decisions to purchase this Demand Studios health insurance program or those offered by your local union, it is a good idea to explore alternatives with your local insurance agent. He or she can help you understand the real costs and risks associated with every limited benefit program and comprehensive health insurance plan. This post is not meant to encourage or discourage enrollment into the program.

* Yolander Prinzel is a licensed life, health and variable annuity agent (2-15). She does not actively solicit clients for insurance purchases or sell any insurance products. She is also not appointed to sell health insurance with any insurers.

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Yo Prinzel
Yolander Prinzel is the profit monster behind the Profitable Freelancer website. She has written for a number of publications and websites such as American Express, Covestor.com, Advisor Today, Money Smart Radio and the International Travel Insurance Journal (ITIJ). Her book, Specialty Ghostwriting: A New Way to Look at an Old Career, is currently available on Amazon.

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16 Comments

  1. Wendy November 20, 2009 Reply

    I don’t work for DS, but if I did, I wouldn’t get this plan. Looking at it from the pre-existing condition point of view, the plan doesn’t even break the ice of what my costs would be. The rates seem quite high for what you actually get as coverage. I also noticed that none of my doctors or specialists are listed as providers on the website. Frankly, the type of specialists that I would need, within my area, aren’t even listed-period. Of course, this is just my particular situation. Hopefully, others, who are considering it, will check it over thoroughly before taking the plunge.

  2. Jessie Fitzgerald November 20, 2009 Reply

    Wendy, from your point-of-view this does seem to make a lot of sense. Thanks to Yolander and Jenn for sharing the real truth and not just blogging about some hype and asking for opinions. When you need facts, you need facts.

  3. Yolander Prinzel Author
    Yolander Prinzel November 20, 2009 Reply

    I knew I would forget something. I wanted to add a section of resources to find insurance as a self-employed individual, here it is briefly:

    National Association for the Self-Employed
    National Writers Union
    Media Bistro/ Avant Guild
    Freelancer’s Union
    Writers Guild of America West
    Your local chamber of commerce (sometimes have group plans)
    Your states high risk pool (if you are uninsurable by individual plans)
    A local agent

    And if you are about to lose COBRA coverage remember that you should be HIPAA eligible. Contact your state’s Department of Insurance for details on converting to an individual policy under HIPAA.

  4. Jennifer Mattern November 21, 2009 Reply

    Thanks for the additional resources Yo. And a big thank you for contributing an insurance professional’s perspective — especially the types of issues people should consider and talk to an insurance agent about before signing up for this or any other new insurance or healthcare program targeting the self-employed. It’s something we’ve not seen enough of since the initial announcement.

  5. Jennifer Mattern November 21, 2009 Reply

    I do have to say that one thing I’m tired of seeing is the ass-kissing elsewhere along the lines of DS being great because other clients aren’t offering insurance to freelancers.

    So let’s have a reality check for a moment….

    When you’re a freelancer, you’re a BUSINESS OWNER. It is YOUR responsibility to secure your own benefits. If you can’t earn enough to afford those benefits that is YOUR problem and it’s YOUR responsibility to find a way to improve your career in general until you CAN afford it. One of my biggest issues with this Demand Studios health insurance plan is that it masks a marketing tactic in a flimsy “we care about you” package. Caring would be paying more or encouraging writers to go out there and do something else that helps them improve their income so they CAN afford comprehensive coverage. Not offering a package that they negotiated but aren’t financially responsible for (like an actual employer paying into a benefits package). They’re doing it because it’s good for business — THEIR business. If you’re a serious freelance writer, you’ll do what’s best for YOUR business so you can afford what benefits you want or need.

  6. Wendy November 22, 2009 Reply

    Jennifer, I agree. I don’t see how this insurance deal makes them the Gods for Freelancing when all the money you make from the articles you write, goes into the insurance. And, the insurance doesn’t cover much of anything.

    They put the stipulation on it that you have to write 90 articles in a 3 month period (I think that’s right). Okay, but when you look at the whole picture, you would have to write that many articles in that time just to afford it. Then you get the privilege of not having much covered when you need it. It makes no sense.

    But, that’s okay, because they offer an insurance option when no one else does! Right. Anyway, I might have been semi-impressed with it, if they had done other things first, like raising pay rates and cutting back on the workers they have. But, they can’t do that if they’re going for a million pieces of content a month, no matter what the quality really is.

  7. Wendy November 22, 2009 Reply

    Sorry for the double post, but I realized that I forgot to thank Yo for the time and effort she put into the article. I really appreciate it.

  8. Jennifer Mattern November 22, 2009 Reply

    They’re only the “Gods of freelancing” in the eyes of people who can’t think critically for themselves. I’ve been loving the comments elsewhere implying that telling people to read the fine print and look at the WHOLE situation of DM’s behavior in this is somehow condescending or implying that freelance writers are stupid. Personal attacks trump facts every time, right? The irony is that people do NOT naturally read the fine print. There have been studies done on the subject to prove it.

    There was a perfect example from a reader on Yo’s blog recently. She announced that the plan details were finally available, and linked directly to the .pdf the info above was pulled from. The very first commenter came out in support of it (specifically the “no co-pays” and lack of barring people with pre-existing conditions), yet admitted they only “glanced” at the plan. Once the fine print was laid out and explained in context rather than legal jargon and marketing hype, their feelings seemed to change pretty drastically.

    Does that mean the writer was stupid? Absolutely not! It means they acted in a very predictable way, just like most consumers do. We’ve become so inundated with fine print that it’s become quite natural to simply skip it and go with the main info points presented to us.

    And you’re right Wendy. When you DO take the time to read all the fine print and compare it to other options available, for a lot of people this plan won’t be worth much. The people who need it the most likely won’t get enough coverage. Those who are relatively healthy and only want it for doctor visit savings will pay more to the insurance company over the course of a year than they’d likely pay directly to their doctor for those covered visits (meaning it won’t actually save them money at all, and isn’t that great of a “perk”).

  9. Yolander Prinzel Author
    Yolander Prinzel November 22, 2009 Reply

    I’m sorry but if consumers read fine print there’d have been no sub prime melt down (I think even a few freelance writers were involved in that one). Freelance writers aren’t some special breed of contract savants. They are the same people who drive too slowly in front of you, who make poor money decisions and go bankrupt, who glue their eye shut on a first date (that one describes me), who lie, who don’t budget money correctly. We need regulations, laws, and breakdowns like the above to help both normal mortals AND freelance writers.

  10. Demand Studios Writer Eric September 14, 2010 Reply

    Thank you for writing this review. It’s good to have people out there holding the feet to the fire and letting us know what’s really going on. Sometimes you have to wade through the happy talk to get to the truth. Great post, thanks again!

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