You should only be dealing with group underwriting if your group has more than 50 employees or you are considering a self-funded group health plan. The employees in your group will have to complete an application form and answer a variety of medical questions regarding various health conditions and prescription drug usage. These forms are then submitted for underwriting where an underwriter takes into consideration what health conditions exist in the group (diabetes, cancer, pregnancies, expensive maintenance drugs, etc.) and then makes a determination if the originally quoted rates for your group will generate enough premium to cover the average expected risk plus the now disclosed risks in your group.
For example, if based on the census of your group the male to female ratio and average age in the group indicated a need for $20,000 per month in premium to cover the expected risk and overhead associated with your group you would start out with an proposal costing $240,000 annually. It is assumed there will be a certain average amount of health care consumption in your group based solely on the factors I've described above. If, however, your group has risks in it that go beyond what is standardly assumed should exist (you have a large number of diabetics or some pregnancies in the pipleline or an ongoing cancer case for examples) then the underwriter will "adjust" the originally quoted rates to reflect the need for more premium to cover these higher than anticipated medical expenses. So, if the underwriter determines that your group is more likely to cost $300,000 in medical expenses and overhead rather than $220,000 as originally quoted, the underwriter will return a "counter offer" with a 36% rate adjustment ($300K/$220K) to accept your group at its real risk level.
.JPG){kind=avatar}
For example, if based on the census of your group the male to female ratio and average age in the group indicated a need for $20,000 per month in premium to cover the expected risk and overhead associated with your group you would start out with an proposal costing $240,000 annually. It is assumed there will be a certain average amount of health care consumption in your group based solely on the factors I've described above. If, however, your group has risks in it that go beyond what is standardly assumed should exist (you have a large number of diabetics or some pregnancies in the pipleline or an ongoing cancer case for examples) then the underwriter will "adjust" the originally quoted rates to reflect the need for more premium to cover these higher than anticipated medical expenses. So, if the underwriter determines that your group is more likely to cost $300,000 in medical expenses and overhead rather than $220,000 as originally quoted, the underwriter will return a "counter offer" with a 36% rate adjustment ($300K/$220K) to accept your group at its real risk level.