 Cornering the small-group market
Small-group refers to the number of employees in a given company.
It can be as many as 100, but is most often two to 50. In this market,
health insurance prices have traditionally been based on two factors:
- Projected cost of medical services in a given geographic area
- Projected
utilization of services
Cost projections are fairly stable across the country. But insurance
companies estimate utilization of services probability on factors
ranging from the medical history of your employees and their dependents
to age and gender. These details affect plan premiums to you and
your employees. If a member of your staff is considered a greater
risk the group will usually pay a higher premium for insurance coverage.
The importance of underwriting
The majority of small-group health insurance companies use a process
called underwriting. An underwriter analyzes risk factors (including
the medical history of each individual) to estimate potential claims
and determine a group's insurability. The insurer's goal? To offer
coverage at a fair price and to ensure adequate income to pay future
claims and expenses.
Small-business coverage options:
Regardless of whether you are a small company or a Fortune 500 giant,
you want to make sure you are getting your money's worth out of a
health plan. It's important to weigh the pros and cons of each choice
when selecting a plan. While premiums vary among different carriers,
recognize that there can be substantial differences in the benefits
provided and in the amount your employees must pay out-of-pocket
for services.
Keeping that in mind, let's look at the insurance marketplace ... >>
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