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eBay To Offer Health Insurance
Logic Bomb writes "EBay has announced it will be offering group health coverage for "full time eBay merchants". Anyone who grosses over $1000/month in sales -- at least a whopping 80,000 users in good standing -- will be eligible to buy into a typical "employee" health plan. This is a big first in the Internet world. Full details from the LA Times." And the LA Times, trying to cop a pose from the NY Times, reqs a login.
I think we're seeing the eventual effects of the web that were severely disturbed by the dot-boom(bomb) phenomenon. Ebay is unquestionably _the_ online auction website and its full time merchants generate a significant amount of revenue for ebay. This further increases the incentive for many of these "marginal" merchants to go full time -- they can drop the job that they may have "just for the benefits" and furthermore, it may make dealing with some of Ebay's idiosyncracies a bit more palateable. About time! Hopefully, ebay will set a nice precedent for the rest of the industry.
When in doubt, parenthesize. At the very least it will let some poor schmuck bounce on the % key in vi. (Larry Wall)
as a small business trying to operate mainly on eBay (for credit card purposes), this is another step in proving how corporate they have become, and another step in eliminating the small sellers, which was the whole purpose of eBay to begin with, the access to COLLECTIBLES not mass-produced merchandise.
I think you missed a key point - It's only sellers who gross over $1k/month that eBay is offering this too, not eBay's entire userbase.
eBay takes a commission from every sale - So those sellers are far, far beyond even paying customers at many sites as far as the revenue they bring into the company.
Meanwhile, Yahoo and MSN are free services, or if they charge, they don't charge nearly as much as the amounts of commissions eBay skims from the qualifying classes of sellers.
retrorocket.o not found, launch anyway?
Whose going to manage these benefits? Will eBay have a new department for assisting their people with benefit claims?
No -- like in any job in the US with a group health plan, you deal with the insurance company providing the coverage and not your employer.
So, if you offer them a large customer base, 80,000 people, then that's a big enough market you start to drop your prices signifigantely
Yup. Admittedly, not all of the people eligible will opt for this insurance -- either they have their own insurance already and eBay's offering isn't better, or they apply and the insurer turns them down due to liability issues (this is why it's critical to always have health insurance in the US -- once you are uninsured for 6 months you can be declined for just about any reason... or you can be insured and "preexisting conditions" will simply be declined coverage).
This will be an interesting precident to set in the marketplace of health insurance
Yup... to call a seller an employee of eBay is something of a stretch, but apparantly they have found an insurer who is willing to try. Kudos. And they're willing to test some very murky legal waters here -- once you offer health insurance for these pseudo-employees, you may discover that the federal government is going to start expecting more from you -- even if it's just forms stating that these people are contractors and that you aren't responible for their FICA and Federal taxes. What about FMLA? What about disability? There's a lot more here than meets the eye in my opinion.
Whose going to manage these benefits? Will eBay have a new department for assisting their people with benefit claims?
In theory, HR does this. If eBay has any clue, however, they'll be using a 3rd party administration service to provide these benefits. They're the ones that actually handle the interface between employees and the health plan -- all your HR does is forward them whatever you hand HR. These are popular nowadays because they significantly reduce the paperwork that HR has to deal with.
Anyone else think there's a web-organization that can claim more members?
That's easy. AOL.
This I feel is the start of the second Internet boom, just this one will be for real. All the companies with no hope of making a profit online are gone. The ones that are left either make money, or at least have a pile of cash they are sitting on.
Buying your couch online is out...earth to owner, couches cost A LOT more to ship than books, and people want to sit in them first. Commerce on the web that makes sense is in. eBay is probably the first in the second stream of successful internet companies to start gaining attention.
Can't wait to see more real profits from the internet...
-Pete
Soccer Goal Plans
the LA Times, trying to cop a pose from the NY Times, reqs a login.
I found myself asking these questions:
In the end, I'm left with the impression that this is just a young kid editing a web page who wants to use a clever turn of phrase he heard. It adds nothing to the story; it takes away much.
Since I doubt that most of theses sellers declare thier full income from ebay, I wonder if the IRS will attempt to use this to get a listing of thoses people.
The 'why' part is obvious (to me). The perception in the eBay community has been that the wholesalers are taking over and pushing the independent sellers out. eBay is attempting to stem a revolt and/or mass migration to another auction site.
It may seem like 1K/month in sales is a lot but compared to the liquidators who sell there, it isn't. eBay needs those 80,000 Power Sellers to be able to keep selling too.
My guess is that this arrangement won't cost eBay much, if any, money from their own pocket. I saw no mention that they are going to co-pay for the insurance. But, they've made it possible for the full-time eBay dealer to get decent group insurance. Not a bad incentive to stay with eBay.
Actually, you don't have to be an employee to get group health insurance. There are many instances of "Association" based health plans: Blue Cross/Blue Shield do this often. It lets lawyers, accountants and other self-employeed professionals get group rates by being members of the Bar Association or something similar.
What do you think? Health insurance companies are looking for targeted groups; this one is largly male, under the age of 50, and in a rather 'soft' industry where on-the-job injuries (except carpel tunnel) are not that common.
I could use it...
How do you suggest that they "bring back the old eBay service"?
They started a medium that turned out to be wildly popular, and I'm sure that [insert company name here] noticed that a lot of people were turning to eBay to buy the same products. Who can blame them (the company) for auctioning directly on eBay also?
What's eBay supposed to do? Only allow individuals? Hah! I'm sure they have no plans to kill half of their revenue stream anytime in the near future. I say bravo to eBay for proving that it is possible to be profitable on the Internet.
"A terrorist is someone who has a bomb but doesn't have an air force." -William Blum
For those of us who are a bit older, the issue with insurance isn't so much the price as it is the availability.
Insurance companies will deny coverage to individuals, or will deny coverage for preexisting conditions, for the flimsiest of reasons. Also, there is no federal law preventing them from cancelling your insurance, or raising the rates through the roof if you get sick.
This same "medical underwriting" applies to small businesses and associations.
In the US, if you don't have a job, you run a real chance of losing everything in order to pay for a medical event. You can always get the treatment - you just may end up broke to get it.
All of the federal protections on health insurance is offered only to people covered by group insurance (companies, etc.) and not to individuals.
Oh, BTW, the insurance companies don't do this just because they are evil predators. They know that if they offer insurance without conditions, too many people will wait until they get sick, or at least until they get old, before applying. This negates the "share the risk" aspect of insurance. OTOH Company insurance, which is virtually forced on all employees, produces a crop of young and healthy people to pay the expenses for us older folks.
Some states have pools from which you can buy insurance regardless of your medical status. Unfortunately, these are almost impossible to get into, or are extremely expensive. And given the previous paragraph, you can see why this is not an ultimate solution.
The only good weather is bad weather.
It sounds like there are group systems for the self employed, but I just wanted to note that personal medical coverage is very different than group coverage. If you are healthy, then it's an option, but if you have a preexisting condition within the last 10 years, you won't be covered on it for the next 10 years, whereas with group coverage it only looks 6 months into your medical history and after 1 year you get full coverage. There are other differences (the price for one. Personal is a lot more expensive), but this was a big one for my wife and I since she has breast and thyroid cancer.
-no broken link
Maybe I can shed some light on this subject. I worked in the actuarial department of a major life insurer, so I have some expertise in this subject.
First of all, you don't have to be an employer to get group insurance rates. All that you have to have is a group of people who are organized for some purpose OTHER THAN purchasing insurance. Most commonly, this is a group of people who work for a particular employer. However, there are other groups that offer group insurance (trade associations, unions, chambers of commerce).
The reason for the organization requirement is because of ADVERSE SELECTION. Adverse selection is where a person purchases insurance because he or she knows that it will be needed in the near future (bad health, pending surgery, etc). Insurance companies hate this because if too many people do this, they will go out of business and nobody will get insurance. This is why companies give you medical exams, don't cover pre-existing conditions, etc when buying an individual insurance policy.
The advantage of group insurance is that because entry into the group is limited to certain people, it is less likely that adverse selection will occur. Because people become members of the group for a reason not having anything to do with buying insurance, you probably won't get people joining just to get the health benefits. Usually you don't have to submit to a health exam to get group insurance. Also, pre-existing conditions are usually covered (with possible a short waiting period). If eBay opened the group membership to everyone, then membership would likely get flooded with sick people looking for the insurance benefits. This would drive up the costs of offering the insurance, and the insurer would probably cancel the policy (or increase the premium rates to much higher levels).
There are other things that insurers do to protect themselves from adverse selection. Group policies often have minimum enrollment requirements. The plan sponsor has to guarantee that a certain percentage of members gets the policy. This is to prevent the case where only the "sick" people in the group sign up. They want to make sure that the people who sign up are a good representative sample of the group. They also have enrollment periods where members can only sign up for the policy during a particular time period. Again, this prevents people from signing up just as they are entering the operating room. Finally, insurers adjust the group premiums from year to year, based upon the claim amount incurred by the group. This allows them to modify the premium if the group turns out to be less healthy than they originally thought.
One of the arguments in favor of nationalized health care is that everybody would be part of one big "group", so there will be maximum risk sharing. Thus, costs would be divided up evenly, as you say. Of course, given the business and political climate in the U.S., it isn't likely to happen any time soon!
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