As a result of the Affordable Care Act, for individuals and small groups (2-50 employees), health insurers are required to accept all applicants, regardless of health. That’s called “guaranteed issue.”
For larger groups, insurers still get to assess the
risk; i.e., applicants are required to disclose health histories. Sometimes, that works out better than expected.
We just put a group of 80+ lives - The ABC Widget Company - through this underwriting drill. For a High Deductible (HSA) Health Plan, we obtained composite rates as follows: Single $276; Limited
Family $553; Family $823. Depending on age and plan design, those rates are about half of guaranteed issue premiums.
But underwriting can be a double-edged sword. Not only does the insurer get to assess risk going in, but each year at renewal, based on the group’s claims
experience.
ABC Widget thinks we worked a small miracle this year. If they get a 38% increase next year, then what?
