How do insurance companies determine the group health insurance rates for small businesses?
Most states require health insurance providers to utilize a pricing method called medical underwriting, a process similar to that used by auto insurers. Before getting coverage, eligible employees may be surveyed by a small group health insurance provider about their general health status. Upon review, the companies may request more specific information about an employee’s medical conditions to help them establish the risk of covering that individual with health insurance. If there is a higher cost risk of covering someone with a pre-existing condition, all employees in a group health insurance plan may see their rates a bit higher to compensate. If the company doesnt provide all the information the insurance company asks for, the insurer can assume the higher-risk situation and charge accordingly. In 12 states group health insurance premiums are governed by community rating, where all residents of a specified geographic location are offered the same premium rate regardless of their he
Related Questions
- If a small employer doesn offer group health insurance but pays accident insurance, does that premium need to be reported on the Form W-2?
- How do insurance companies determine the group health insurance rates for small businesses?
- Do many insurance companies believe green businesses deserve lower rates?
