The Insurance Broker Blog

Credited byline to Dena Allchin, Director of Large Group Sales

The definition of a “Small Group” versus a “Large Group” when it comes to Group Health Insurance differs by state. If you’ve sold any Large Group business, you probably know that Large Groups in California are defined as those having 101 or more full-time or full-time-equivalent employees. In contrast, Nevada defines Large Group as employers with more than 50 full-time or full-time-equivalent employees.

Full-time workers are easy to calculate, because they are working full-time hours for their employers; full-time equivalent workers are those not working full time, but who in combination are counted toward the equivalent of a full-time worker. As an example, two employees who work part time could be combined to equal the equivalent of one additional full-time worker.

If an employer has at least 50 full-time employees, including full-time equivalents, the business is an Applicable Large Employer (ALE), and it is subject to the mandate. If the business does not offer affordable health insurance coverage that offers minimum value to 95% of full-time employees and dependent children until they turn age 26, it is subject to ACA penalties.

Large Group Differentiators

Not just your clients’ group size differs for Large Group versus Small Group. There are other differentiators, too. These include:

• Rates – Age-banded rates apply for Small Groups. Custom rates apply to Large Groups. Rates are non-negotiable for Small Groups, but they are negotiable and uniquely and experience-rated for Large Groups. In addition, Large Groups may be eligible for bundling discounts, premium holidays, and wellness allowances.
• Metallic Plans – Yes for Small Groups (Bronze, Silver, Gold, and Platinum). No for Large Groups.
• DE 9C in California – Yes for Small Groups; no (at the carrier’s discretion) for Large Groups.
• Pediatric Dental and Vision are Essential Health Benefits and must be included for Small Groups; however, they are not required in the Large Group marketplace.
• Medical Loss Ratio (MLR) – the Small Group MLR is 80%, with 80% of premium dollars spent on health care-related expenses and no more than 20% of premium dollars spent on administrative costs, marketing, and profits. In the Large Group market, the MLR increases to 85%.
• Quotes – Small Group quoting is automated and available through WBQuote and WBQuote Lite. Large Group quoting is custom to the group.

Employers are required to determine their group size annually, at the beginning of the year, based on full-time equivalents for the previous calendar quarter, six months, or year. A group’s calculation applies to the full calendar year, even if the group size may vary during the same period.

Online Resources

Word & Brown offers a variety of resources through the Insurance Forms Library on our website. We’ve made recent improvements to the site to make it even more helpful to you: front-and-center Carrier and State selection controls; improved sorting by name, carrier, coverage type, effective date, and last updated date; multiple form downloads at one time; and an overall cleaner display.

When it comes to Large Group business, you can readily access these forms:

• Medical Proposal Request
• Quote Request Checklist
• Frequently Asked Questions
• Group Master Application
• Participation Guidelines Chart
• Underwriting Requirements Comparison Chart
• Health Plan Reference Guides
• And many others

Discovery Call

There is tremendous value in coordinating a Large Group Discovery Call with your client before we submit your Request For Proposal (RFP) to our carrier partners.

A Discovery Call gives you – and us – the opportunity to uncover your client’s wants, needs, and concerns. These may not always be uncovered during the conventional RFP process.

Gathering information during this call can help you address your client’s pain points, such as provider network issues, service issues, pharmacy coverage concerns, etc. The goal is to capture as much detail as possible up-front, so you can deliver an accurate, competitive solution to address your client’s needs.

You might consider the following in your discussions:

-Did the client advise you they would like a “market check” to get a pulse on rates and plans? Are they asking for a review to see if their renewal is still in line with current market conditions?

-Is the client motivated to make a coverage change? If so, what’s driving it? Rates? Plan benefits? Service? Provider network? Something else?

-If premium is the motivation, what is the client’s target savings? 5%? 10%? Something else?

-What is the client willing to change to achieve the targeted premium savings?

-Would the client consider a limited network?

-What about an increase in plan deductibles?

-Would bundling new coverage give them a sufficient discount?

-What is the group’s current participation rate? Discuss strategies for improving participation. One option might be to select a limited network with a lower-cost premium as a base – with an option for employees to buy up to a full network HMO.

-Are mandatory enrollment meetings an option? These tend to increase participation by 10-20%. Employees feel better about choices when there is a formal pitch via an enrollment meeting, webinar, or online enrollment.

Ask your Word & Brown representative about expanded services for eligible brokers, based on your production level, including current vs. renewal options, benchmarking, and more.

After the RFP, when your client makes a coverage selection, you can count on your Word & Brown team to help you with enrollment support – in person, via webinar, or both. For your California groups, ask about our multilingual enrollers.

Don’t forget, your groups may be eligible for value-added services like COBRA, POP, ERISA, and FSA services, HR support, and more. Be sure to ask us for details.

Broad Carrier Roster

Word & Brown works with a diverse roster of carriers and administrators for different market and coverage segments. The tables below show our California and Nevada partners for Small Groups and Large Groups.

+ Word & Brown has Large Group contract with carrier.

++Word & Brown has Large Group contract with carrier, although some agencies may be excluded. Please contact your Word & Brown representative for information.

+Word & Brown has Large Group contract with carrier.

*No Word & Brown Large Group contract with carrier; commission split required.

MediExcel and SIMNSA offer cross-border coverage in California. Worksite Voluntary coverage is available through Aflac. Ask your Word & Brown representative for details.

+ Word & Brown has Large Group contract with carrier.

++Word & Brown has Large Group contract with carrier, although some agencies may be excluded. Please contact your Word & Brown representative for information.

+Word & Brown has Large Group contract with carrier.

Contact Us to Get Started

Don’t be afraid to get into Large Group sales, because Word & Brown’s Large Group team is here to assist you every step of the way. We are committed to helping you grow your business – and keep customers coming back, year after year.

Small Group sales can make your month. However, Large Group sales can make your year. Contact your Word & Brown representative today to get started. Or, if you are not already doing business with us, call (800) 869-6989.