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BUNDLED EMPLOYEE BENEFITS PRODUCT AIMED AT OWNERS OF SMALL BUSINESSES

Health Care Plan and U.S. Life Insurance Co. want to attract small businesses with a bundled insurance product.

The three-for-one insurance program, called The Total Business Package, combines health insurance, dental insurance and life insurance into one product with one monthly premium.

The new marketing approach attempts to lure local small business owners who may feel too busy to shop for and administer three different employee insurance benefits.

"We thought it would be appealing to the small businessman if we could meet all their insurance needs," said David Chojnacki, associate director of sales for Health Care Plan. "For a small business owner who probably wears 10 or 20 hats, time is a very valuable commodity."

The product launched late last month is being targeted to businesses with three to 50 employees.

This is the first time Health Care Plan, a health maintenance organization, teamed with another insurance company on a package product. Other companies, particularly in other markets, have developed similar strategies.

LaborHealth, a Community Blue product introduced earlier this year, offers the three types of insurance for participating companies.

Health Care Plan and U.S. Life, based in New York City, hired a local third-party administrator to collect monthly premiums and distribute the revenue. The insurance companies are paying the administrative expense and no additional fees are passed along to customers, officials said. They are banking on increased customer volume to make up the administrative expense.

The prices for Health Care Plan's four options are exactly the same within and outside of the bundled product. The company has 163,000 subscribers in the eight counties of Western New York.

U.S. Life has lowered its dental rates for businesses buying the package deal under a group discount. But the biggest savings to a business owner might come in time.

"It was confusing dealing with several different insurance companies. It was hard to keep track of and there was a lot more paperwork," said Jeff Mucciarelli, owner of Gabe's Collision, a 15-employee business on Genesee Street.

Unlike large local businesses, Gabe's Collision has no human resources director. Mucciarelli has an administrative assistant to help him with insurance issues, but she does not specialize in benefits, he said.

The package plan costs his business about $3,000 a month, which he estimates as a $500 premium savings a month rather than buying a la carte.

Some small business owners purchase benefits through the Buffalo Niagara Partnership, or other associations. Employee benefits have become an increasingly important small business tool in a tight labor market, according to Stanley Wyner, chair of the Partnership's small business committee.

"Benefits have become a real competitive issue, a way a business person can attract the kind of employees and retain the employees they need," Wyner said.

Health Care Plan appears to be hitting the market with the new product at just the right time. The public disagreements between Independent Health and some local health care providers has increased consumer interest in insurance products, according to Timothy S. Cochrane, vice president of Niagara Benefits Group Inc., an employee benefits brokerage in Williamsville.

Health Care Plan is making a concerted effort to sell the concept of bundling. Most of its advertising for the product has used The Total Business Package name, rather than the Health Care Plan name.

"Instead of marketing the Health Care Plan name, we decided we're going to market the benefits of the package. We want to market the concept, the bundling of benefits," Chojnacki said. "This gives consumers an approach they haven't seen before in this marketplace."

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