Level-Funded Underwriting Factors
| Factor | Impact on Rates | Employer Action |
|---|---|---|
| Claims history (3 years) | Primary driver of rates | Manage claims proactively; document health management efforts |
| Industry | High-risk industries pay more | Implement safety and wellness programs |
| Workforce demographics | Older workforces pay more | Implement age-appropriate health programs |
| Chronic disease prevalence | High prevalence increases rates | Implement disease management programs |
| Stop-loss attachment point | Lower attachment = higher premium | Accept higher attachment to reduce premium |
Underwriting Adjustments
Carriers may apply underwriting adjustments for specific high-cost conditions — cancer, transplants, dialysis, or other catastrophic conditions. These adjustments increase the employer's rate to reflect the expected cost of these conditions. Understanding underwriting adjustments helps employers anticipate rate changes and develop strategies to mitigate them.
Preparing for Underwriting
Pro Tip
Prepare for level-funded underwriting by: (1) organizing 3 years of clean claims data; (2) documenting health management programs and their outcomes; (3) identifying and explaining any large claims (one-time events vs. ongoing conditions); and (4) demonstrating favorable trends (declining claims costs, improving health metrics). Carriers who understand your health management story are more likely to offer favorable rates.