Florida health insurance approval often seems like a confusing track with twists of jargon and blind curves. But underwriting departments, the areas that decide on health insurance coverage, have rules of the road that carefully guide the process. For each client the underwriters evaluate the risk of insuring individuals and then decide on appropriate coverage and costs. Use this guide to help you navigate the process for your business.
The Major Arteries
In general, commercial insurance plans in Florida fall into three territories: individual, small group, or large group. The State of Florida defines small groups as companies with 50 or fewer employees and large groups as business with 51 employees and up. Risk evaluation is also regulated by the state. Depending on the policies, insurance companies may review applicants? medical backgrounds and decide whether to accept or deny applications.
Lone Ranger: Individual Insurance Coverage. Any individual not on another medical plan can apply for individual insurance coverage. Individual medical insurance is the only kind where companies can deny an application on an individual basis. High-risk individuals may not be able to get this type of insurance. The lowest, standard price for individual healthcare plans is determined by age and gender. Sometimes applicants with health issues are accepted, but they may have to pay a higher rate. For example someone with moderate asthma would pay more than someone who did not have asthma. Other times, health insurance providers will exclude a particular condition from coverage for a particular period of time.
Caravan Journey: Small Group Insurance Coverage. In order to qualify for small group coverage, an employer must meet minimum requirements. These include whether an employer is a legitimate business, and most importantly verification that the employees truly work at the company. Government regulations prevent insurance companies from denying coverage to individuals within small group plans based on medical conditions. People that would not qualify for an individual healthcare plan would be eligible for health coverage in a small group plan. Small group pricing is based on a standard rate that is an average of the risk associated with each of the individuals in the group. Within a small group plan, individuals can pay up to 15 percent more or less than the standard rate, depending on their medical condition. Healthy individuals could end up paying more in a small group plan than on an individual plan because the rates are determined by the composition of the whole group.
Rush Hour: Large Group Insurance Coverage
Large group coverage has many similarities to small group coverage. Employers and employees need to satisfy similar eligibility requirements.
Insurance companies are also prohibited from denying coverage to specific people within a large group plan because of a medical condition. Pricing within a large group is based on a weighted average of risk among all of the employees and on which type of plan employees choose.
Improving Your Medical Mileage
Business owners need to decide on their goals from a financial and social benefit standpoint and allow those objectives to guide their conclusions about company healthcare. Insurance prices can vary dramatically for similar coverage and doctors within an area, so employers should shop around for the best value. Another consideration for business owners is what percentage of healthcare costs do they want to take on versus how much they want their employees to pay. The more employees pay in monthly premiums and in out-of-pocket expenses, the less business owners need to pay. However, medical benefits can be used as a retention incentive, so it could be to employers advantage to take on a large portion of medical costs.
On the social side, employers can check if a medical plan will cover the special needs of a particular employee. Due to the high level of regulation, large group medical plans will most likely be required to cover treatments. Another medical insurance scenario is where individuals are given a choice between company or individual insurance. In general, this doesn?t benefit the company as a whole. If the least healthy individuals are the only ones left in the group plan, medical costs can rise to high levels. The people on individual plans may benefit in the short-term but they?re hurting their fellow employees. Also, they?re possibly hurting their ability to get reasonably priced health insurance in the future when they?re not in as good of health.
Reaching Your Destination
As business owners decide on health care plans for their company, they should evaluate the products, services, and costs of different insurance plans. Finding an insurance provider with a solid track record who will serve your business is crucial to the safe and smooth journey of your company through the maze of Florida health insurance coverage.
JOHN R. CANTILLO is vice president of underwriting at VISTA Health Plan Inc. An industry expert with more than 10 years of experience in health insurance, he received his MBA from the University of Florida. Cantillo is a member of the Health Underwriting Study Group, a national think tank and information source for health insurance executives. Reach him through VISTA Health Plans at http://vistahealthplan.com, or at 954-965-3420.
