Get ready for group health insurance renewal season

January 2012

Kathi Miller, benefit specialist at the Medical Society of Virginia Insurance Agency (MSVIA), shared the following tips to help get everyone prepared for the group health insurance renewal season. After all, your group health insurance renewal deadline will be here before you know it! The best time to begin your preparation for your group renewal is now—the typical renewal research process starts between 90- and 45- days prior to the effective date.

There are three basic ways you can approach researching options for your group health insurance renewal:

1. With basic census information, carriers can provide illustrative rates to use in determining whether their "starting" rates indicate a potential for competitiveness with your current rates for comparable benefits. This may help narrow the field for research.
2. Groups with more than 25 enrolled may opt for an expedited option for obtaining underwritten quotes, depending upon the insurance carrier. This process utilizes a group risk application (carrier-specific), which essentially inquires about any health conditions within the group that are known by the group administrator (the person authorized to complete the form).
   
   It is important to note that, while rates obtained in this manner may be lower, they are more susceptible to significant increases at renewal. This is because carrier underwriters formulate the rates based on very limited information. In the course of the year, any health conditions discovered may adversely impact the renewal. Conversely, in the absence of detailed information, underwriters will go to “worst case” scenario if general conditions are listed (e.g. diabetes), and rates may be higher than actually warranted. Carriers typically do not reduce rates at renewal.
3. The most accurate rates are obtained by having each eligible employee, including those who are waiving coverage, complete a single universal health application, which can be utilized to market to multiple carriers. This method will be the most time-consuming, but it will result in more accurate and sometimes lower rates that are less susceptible to significant renewal increases because the carrier underwriters are supplied at the outset with detailed information regarding conditions within the group.

Whichever way you decide to proceed with your research, MSVIA is here to help you navigate the process. You can contact MSVIA at customerservice@msvia.org.