Insurance Agent Forum

[Dave020]

Hey Gang,

Could use some input on what you all are doing or what can be done as relates to the following situation:

Small group has renewal date of say January every year. Group has an "all plans" election in place because plan changes not done this was require underwriting and do not enjoy the GI that new groups get (meaning they can be declined for the change).

So Jan comes and goes no changed desired, April comes and carrier does focal review and raises rates 25%, then July comes and employees age-change to next band and get another lovely 22% increase. So, we have in a period of a few months seen a small group experience a 47% rate increase that they have to ride out to the next January before they can make plan changes.

Needless to say, shopping a new carrier and new GI enrollment is the obvious option if the rate increase is objectionable.

My question is, since this is probably fairly common (and let's assume that these particular groups are dependent friendly and it makes no sense to have the dependents on IFP), does anyone actually have a tracking method in place to deal with this before it comes up? I can't imagine short of hiring help just to track 3-4 dates per year per employee per group that this is really very feasible.

How do you guys keep people from getting slammed like this? Or do you just change carriers every so often?

Thanks

[djs]

It was much easier before carriers decided to do mid-year age change rate increases.

Only thing you can do is when the group renews (in January) is to take a guess at what might happen during the year, with employees having birthdays, falling into new age bands. You have to make the changes in December, so it's not a matter of tracking dates, but checking them in December for the January renewal.

I always feel the carriers should stick to the rates for a year, once the group renews. I can almost deal with the age change causing a known increase, but the somewhat random rate change in the middle, compounded with the age change is a pain in the @#$@#$@#

You can of course, go elsewhere, but that is also a pain...

Dan

[Delta76]

I don't think there are any good answers. Fortunately, in my state, the rates are locked in from renewal to renewal except for age step-up's, which are fully predictable.

[djs]

Right, but its the age step ups, compounded with the rate increase at renewal, that makes it a requirement to think this through in advance.

I feel Dave's pain on this. It's not so bad to do this on one or 2 small groups, but when you have multiple groups, with 10-15 employees each, it can be a lot to think through with the employees that are changing age brackets every year.

Dan