Tips for Buying Coverage

Arizona Restaurant News – September/October 2010
Arizona Restaurant Association

With the average premium health insurance coverage for families nationwide over $14,000 and for individuals over $5,000 (according to a study by the Kaiser Family Foundations and the Health Research & Educational Trust), it is not surprising to find purchasing apprehensions in the health insurance market. In addition, the majority of employer sponsored health plans are trending toward PPO coverage with $1,000 to $1,500 deductibles. Not taking into account future changes in the healthcare market, employers are currently required to cover a minimum of 50% of an individual premium if they are sponsoring a group health benefits plan for employees.

Health insurance is extremely costly and volatile in Arizona. Regardless of whether employers plan to renew, reinforce, or purchase coverage new, it is imperative to remember a few simple rules while going through the process:

• There are three people involved in the purchase of health benefits: the customer, the broker and the underwriter.  Underwriters have to answer to a profitability and are therefore in search of the best rates. More importantly, however, is that underwriters have to justify those rates. When rates can be justified, the underwriter is more comfortable loosening the purse strings.
   
• It is important to ensure that an underwriter has accurate information in order that they can provide the best, most comprehensive quote. Generally, groups under 25 lives should fill out Health Evidence Applications, a document asking for profile and health information about the individual and their family. While a number of employers feel disinclined to fill in this document, by providing the information asked for in these forms, employers are helping to secure the most accurate price quote, thus protecting their investment.
   
• All previous health insurance coverage information should be kept somewhere accessible. Using this information, employers can easily review proposed rate increases. It is best to review these increases with an agent or broker in order that they can answer any questions. In addition, when drafting a quote, the underwriter may also want to review these documents.

Carriers will inevitably have a bad year, leaving consumers with large increases. However, by developing a long term relationship with one carrier and ensuring group initial coverages are properly underwritten, underwriters can find overall rate stability for the client.

Western Growers Insurance Services is endorsed by the ARA to provide health benefits to its members.