Southeast Health Plans, Inc. is a service company that will provide health plan administrative services to self-insured employers. The company will concentrate on employers with 50 to 500 employees. Many of these employers have a current HMO, PPO and major national insurance carrier healthcare plans. Most employers with 500 employees and more have at minimum some self-insurance. But, this market is often ignored or overlooked by national insurance companies. While more than 80% of companies with 500 or more employees are self-insured, the management of Southeast Health Plans has identified that less than 25% of Atlanta area companies with 50 to 500 employees have self-insured plans.

Companies that are currently self insured as well as those that have other health plans will be able to switch to self insurance. High quality consulting and administrative services are key factors in the transition to auto-insurance. Southeast Health Plans, Inc. has a highly experienced management team and formed a strategic alliance to Blair Mill Administrator, which is a wholly-owned subsidiary of Blue Cross/Blue Shield Pennsylvania, in order to provide first-class benefits management services for its target market.

Southeast Health Plans, Inc. expects to achieve a revenue of over $5 million within five years and a net profit after taxes of $1.6 million. The company will be profitable in the third year with $560 million in after-tax profits. Margins as a marketing agency and service provider will be exceptional with gross margins exceeding 80% (less just sales incentive costs) & approaching 50% after all operating costs, once market penetration reaches maturity.

Southeast Plans, Inc. is able to attract initial capital for the successful marketing of its services in metro Atlanta and northern Georgia. This will be key to its success. Adequate professional sales staffing is essential. It is then necessary to establish a solid formula for expansion in the Southeastern regions. Cost control, particularly with regard to sales and marketing programs, will enable controlled expansion that is fully funded by internal cash flow.

1.1 Objectives

The objectives for the company are:

1. Co-operative marketing using Blair Mill advertising executions in the Atlanta metropolitan market
2. To hire and identify sales people to follow up on sales leads.
3. At least 4,800 employees total under management by year end.
4. To break even by the end year two with a net loss of less than $100,000. While increasing market share,
5. To shift to earnings by year three, and to accelerate gross margin contributions by building market maturity over infrastructure.
6. To expand regionally using both sales and media personnel to penetrate new market segments while consolidating our service capabilities.
7. To constantly achieve cost benefit through an expanding provider network while not compromising patient care.
8. To have more that 98,000 employees under management by year five.

1.2 Mission

Southeast Health Plans, Inc. was established to offer small and mid-sized businesses a comprehensive benefits program. This will enable them to keep their health insurance costs under control, and allow employees to have access quality health care. By combining self-insurance with stop-loss programs and efficient plan administration Southeast will provide to its clientele, both employers and employees, the best of health care with the minimum of restrictions and the broadest individual choice of providers. Southeast will deliver quality care while allowing for freedom at a fair rate.

1.3 Keys for Success

These are the keys for success in this business:

1. Southeast Health Plans. Southeast Health Plans are now able to offer their services directly to employees and through independent brokers and agents. It will be necessary to establish name recognition among more established programs. It is vital that media budgets remain under control and that closing ratios of no less than 5% per year are maintained.
2. Quality service. Blair Mill Administrators’ services are considered the best among small-employer providers. The Southeast Health Plans, Inc. management team, and their provider networks, will provide customer satisfaction.

It is a necessity that clients maintain satisfaction both with service and plan cost to minimize client erosion and to combat competition. Renewals should not exceed 85% for clients who are already established.