North Carolina Business Health Insurance Options
North Carolina is a very diverse state. In addition in the business health insurance marketplace the employer size drives specific underwriting models. As such if you are a small business with less than 25 employees you are “medically-underwritten” which is common in many other states and is exactly what Obamacare is out to abolish. This type of underwriting includes medical questionnaires for every employee as well as an employer application (also information on all employee’s dependents is gathered). This information is then submitted to the health insurance carrier for a full underwriting (the original rates provided by the brokerage market at normally at a rate adjustment factor of 1.0 which we can call “average”) – once underwriting is complete the rate adjustment factor can change up or down and as a result so can the rates.
Once a group is over 25 employees a full census of employees is still required as it is in the under 25 employee market (with age, gender, marital status, home zip code) though an employer questionnaire is then submitted regarding medical claims information. As such, this too will drive the final rates – this is a bit more common to other states and what is deemed “manually” rating or demographically underwritten.
Once a group grows over 50 employees or even 100 and has a few years of credible data from an insurance carrier, the modeling then moves more to one of claim’s experience – what claims are paid out compared to premium collected, in addition to medical trend (inflation) and administrative costs.
North Carolina has an unbelievably high marketshare dominated by 1 insurance carrier, Blue Cross Blue Shield of North Carolina. As experts in this field, this is very bad for the market, hospitals as well as consumers. It is a monopolistic structure; however over the years it has been very difficult for competitors – Humana, Wellpath, Aetna, United Healthcare, Cigna – to encroach on that marketshare. Blue Cross Blue Shield also does not like to credential new brokerages, and has a system that seems to be controlled by just a few. Again this is not good for employers, hospitals or consumers, as their needs to be much more competition.
In the 3rd quarter of 2011, United Healthcare began it’s blasting of the North Carolina market, specifically metropolitan Charlotte, with billboards, radio advertisements and commercials…in addition they have stormed the brokerage market with a new offering called Multi-choice. It is leagues ahead of their competitors, Blue Cross Blue Shield of North Carolina, Cigna, Aetna, Wellpath, and Humana. With Multi-choice employers with 2-49 employees (predominantly most of the marketplace) are able to implement a suite of products chosen from 30+ options, and are able to have an a la carte menu. Their positioning is one of a defined contribution approach where an employer offers a specific dollar amount monthly to all employees, they then select based on their own criteria which plan and price point fits best. Blue Cross, Aetna, Humana and others have nothing of the sort.
