I have several questions regarding these plans:

1) The company's offering these plans claim they are not offering insurance. They are marketing to individuals without any company obligation. Is there any regulation for these plans?

2) Do they need to be sold by licensed agents?

3) As health insurance cost rise and more of these type of plans "pop up", will litigation and regulation increase?

4) What are the drawbacks of a plan that costs about $120/year but claims to save thousands in discounts on prescription, dental and vision?

5) As an employer, I am opening a liability to offer this to my employees if they pay the company directly?

The growing popularity of supplementary benefit plans and the more comprehensive medical savings programs is a direct result of escalating insurance premiums and pre-existing condition exclusions.

These programs are not insurance, as you noted, but they offer responsible members savings of 15 to 60% (sometimes more) at the time of service. In exchange for payment at the time of service, members pay the lower PPO Network rates enjoyed by major insurance companies nationwide.

Programs vary widely in the level of service, participating providers, cost and reputation. Investigate through the Better Business Bureau, Hoovers Online, etc. Check to see if the company is public, how long in business, financial growth, and guarantee(s).

Health savings cards do not require the intense regulation and licensing of insurance companies. Such reduced "Fee for Service" programs do not require underwriting, medical history, exclusions or exemptions, and there are no claim forms requiring 3rd party payments.

The best companies have contracts with the most reputable PPO Networks nationwide, and have met approval with state licensing boards. Some medical savings programs also offer the option to add a catastrophic or indemnity insurance plan to further reduce the amount members pay.

Employers and individuals do not assume liability beyond the enrollment agreement. Individual members (or employers) pay an affordable monthly membership with no additional deductibles, exclusions or limits on service. Each member is responsible for prompt payment of network rates.

The insurance industry is naturally resistant to anything that is not insurance. Consumer Reports consistently states that such "discount cards" are not insurance and should not be viewed as an alternative.

But for the uninsured, uninsurable and underiunsured, such health programs may be the only available option. An increasing number of employers, individuals and families find premiums priced beyond their means or fail to qualify. As a result, this segment of the population is already underserved by traditional health insurance.

Medical savings programs offer everyone the opportunity to access health services and reduce healthcare expenses.

I hope this helps.