When it comes to buying group health insurance, there is strength in numbers. And, big numbers have traditionally gotten the best deals. According to most sources, over 70% of Americans obtained coverage through their employers. Many of those employers are large companies with strong-arm power at the insurance bargaining table. As a small-business owner, however, there is no reason to feel left out. There are Health Insurance networks that offer all the tools you need to find the highest quality coverage at the best possible price. 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 for 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.