Healthy Alternatives

Sick of soaring premiums, David Elkind is considering self-insurance for his seven employees. In August he asked to hear from companies that have gone that route (Company, Insure Thyself, August, 1991, [Article link]).

It would be dangerous for someone with just seven employees to self-insure. Instead, you could take out a standard small-group-health-insurance policy with a large deductible -- say $1,000 -- and self-insure for the deductible. That way you could lower your premiums by as much as 35% while maintaining a fully insured program for catastrophic claims. Look at coinsurance after deductible, too. If you changed an 80/ 20 coinsurance to 50/50 with the same liability, you could pick up another 15% reduction. That will buy you time to look around for alternative programs.

Lou Zettler


The Insurance Warehouse


We opted to self-insure our 30 employees five years ago, when our premiums were about to jump 47%. The major drawback to self-insurance is catastrophic illness, which can bankrupt a small company. We've protected against that by buying stop-loss insurance. Overall, our savings are substantial. A third-party administrator handles processing and payment. The arrangement is simple, and payments arrive more promptly than when we were with a major insurer.

Dick Greenlaw



Colton, Calif.

PC Police

Salespeople assured Bennie Warren that the computer system they were selling him was upgradeable and expandable. He outgrew it in a year. This time he wants to buy smart (Once Burned, August 1991, [Article link]).

Do your homework! Spend enough time with your people to determine your short-and long-term goals. Also document your plans, and request proposals from several providers. Insist that they offer a variety of hardware and software solutions. Select a provider with a strong support division. Don't be afraid to negotiate, and get your guarantees of delivery, installation, and support for the short and long term in writing.

John Taylor


Cedar Rapids, Iowa

Computer salespeople push the equipment the manufacturer puts a bonus on. Find a consultant who does not sell hardware. Such consultants market their knowledge, not equipment, and can offer unbiased opinions.

Charles Kerekes

Info AGE Consulting


Even independent consultants favor one system or another. To eliminate bias, ask former clients if the consultant offered them a few good options. Or go with a vendor that has committed itself to a consistent upgrade of its systems. That will cut any upgrade costs.

Michael E. Quattlebaum

Financial Manager

Just Barbecue

Clemson, S.C.

Multilevel Misgivings

Deborah Grove recently joined a multilevel marketer but remains concerned about talk of unprofitable cycles and shady companies (Secrets of the Pyramids, August 1991, [Article link]).

New members in multilevel-marketing companies stop making money when they quit selling or when the company folds. An individual's income potential has little to do with company life cycles. I suspect doubts were raised in your mind by someone promoting a ground-floor opportunity. I know NuSkin's promotional video claims that the best time to join is before a new company gets into its "momentum cycle," but it doesn't mention a bad time; it only implies that if you wait too long, the market will become saturated. Can that happen? It's hard to say. Companies such as Amway and Shaklee are clearly in their mature cycles, but new distributors join them daily and, it seems, make money.

I recommend you contact the Direct Selling Association (202-293-5760) or the Multi-Level Marketing International Association (714-854-5488) to see if the company you're joining is a member. There is more to multilevel marketing than sharing and hard work. You might run into a pyramid scheme. Be sure to research it thoroughly.

Zac Morgan

Grapevine, Tex.