Fully insured small group (i.e., 2-50 employees) health plans are generally pooled with all the other businesses in their insurance carriers’ book of business.  Renewals therefore are based on the claims experience of hundreds of employers and thousands of lives.

Very large companies can also spread risk over thousands or even tens of thousands of lives.

This is one way we (strive to) achieve single digit premium increases.

By definition however, “a large group” is any employer with just 50 or more Average Total Number of Employees (ATNE).

Employers in this space are vulnerable.

Case in point.

‘ABC Mechanical’ has ~ 90 employees covered by a Trade Union Health Plan, leaving just 9 non-union Office Staff covered by a separate experience rated  ‘large’ group health plan (because their ATNE > 50).

Just one individual within this group has claims three times greater than the $160,000 current annualized premium. The carrier is asking for a 57% increase. Given the 300+ % loss ratio, it could have been worse.

The ‘remedy?’

Most likely, ABC will be forced to drop their Group Plan, sending the non-union staff to the ‘Obamacare’ Marketplace, where individuals are guaranteed coverage regardless of pre-existing conditions. 

Or maybe Thetis?