Large Group Health Insurance & Employee Benefits

What is considered a large group and how is it rated?

According to, the Definition of a Large Group Health Plan is as follows:  

In general, a group health plan that covers employees of an employer that has 101 or more employees. Until 2016, in some states large groups are defined as 51 or more.

By most carrier standards, a large group would be an account with 51 or more eligible employees. However this term can be very subjective.  A company with 51 eligible employees, but only a handful participating would still be considered a large group by most state insurance departments. However the broker and the group administrator may not agree.  This is primarily because large groups are generally subject to medical underwriting, experience rating or having the rates based on the demographics - i.e. basing the rates on the average age, dependent status, zip code and gender make-up.  Many times this rating process includes the employees not even participating on the plan.     

There are various thresholds and requirements that pertain to large groups.  For instance, most carriers require a participation percentage of usually 75% of net eligible employees to enroll to be considered for the marketing and the renewal of the account.  The term ‘net’ factors the number of employees available after deducting those covered by their spouses and sometimes by Medicare or Medicaid.  

When is an account experience rated?

Typically accounts are experience rated when over 100 employees are enrolled, however negotiated discounts are often contemplated on accounts with less than 100 enrolled if they run well with respect to claims.  That is maintain a low medical loss ratio (MLR).  Conversely, if an account is running poorly, renewal premiums often increase above industry trending rates.  All this is subject to change with health care reform.  

Loss information is usually only available on groups with over 100 enrolled. So how does a broker/agent effectively market an account when loss data is unavailable if the group has less than 100 lives enrolled but is still considered a large?  All we can say is that there are other tools available.

By William F. Schaake, CIC, CRM  © 2011, Revision 2016

Large Group Health Insurance Changes Under Health Care Reform

“To ensure premium dollars are spent primarily on health care, the new law generally requires that at least 85% of all premium dollars collected by insurance companies for large employer plans are spent on health care services and health care quality improvement. For plans sold to individuals and small employers, at least 80% of the premium must be spent on benefits and quality improvement. If insurance companies do not meet these goals because their administrative costs or profits are too high, they must provide rebates to consumers.”  Source:

Requirement to Offer Coverage  


Beginning in 2014, employers with 50 or more full-time employees that do not offer health care coverage must pay a fee if any full-time employee receives premium assistance through an Exchange [$2,000 multiplied by the total number of full-time employees minus 30, as the first 30 employees are exempt].

Employers who offer health care coverage must pay the lesser of: $3,000 for each full-time employee who receives premium assistance through an Exchange or $2,000 per full-time employee (minus 30).

More on Requirements from UHC

Employer Resources

Understanding Your Fiduciary Responsibilities Under A Group Health Plan by

Employer Requirements


Federal Acts & Legislations

Employee Benefits Compliance Articles & Links

Colorful Pie Chart

Our Office Assists with All Forms of Customer Service Including the Following:

Enrollment & Termination Processing

COBRA & FSA/HRA Administration

Aggressive Marketing on Renewal

Claims Disputes & Billing Reconciliations

Compliance and Regulatory Guidance

Direct Provider of Total HR Access

Electronic Document Sharing

Full Enrollment Services

How do we get compensated?

Usually we get paid by the carriers, however under certain circumstances we can charge a fee for the services rendered.  This provides an impartial approach during situations of competitive bidding.  Most of the time we work through independent insurance agents and brokers.  Generally a commission split is negotiated prior to the commencement of the insurance sale.

Some of the Carriers We Represent

Aetna - Cigna - Coventry - Colonial Life - United Healthcare & Oxford  Health Plans

 Emblem Health - HIP/GHI - AFLAC  - Empire Blue Cross Blue Shield

Horizon Blue Cross Blue Shield - Anthem Blue Cross Blue Shield

Guardian - Metropolitan - Assurant - The Hartford - Lincoln Financial

Delta Dental - Mutual of Omaha - AIG / American General / Chartis

Principal Financial - Unum - Voya - First Rehab - Zurich - Standard Security

Is your agent right for your company? Ask these questions before selecting an agency:  

About the Agency

How long have they been in business?

Which carriers is the agency contracted with?

How is the office structured and is there a point person?  

What ancillary services are provided?  

How are documents saved and archived?

What other benefits does the agency provide?

Servicing Process

Who services the groups and responds to their needs?

How are COBRA eligibles and participants handled?

What online services are offered and at what charges?

Are compliance and regulatory matters addressed?

Does the office work with outside experts for unique issues?

Are employee issues addressed by the agency or referred out?

Renewal Process

Upon renewal, how aggressive is the marketing strategy?

How far in advance is the account marketed for renewal?

Who performs the enrollment meetings?

Is there assistance with the preparation the renewal?

Does the agency build in extra compensation for themselves?

What is needed to quote a large group benefit plan?  

   For more details, see the following guideline for large groups>>  

Large Group Health Insurance & Employee Benefits

What is considered a large group and how is it rated?

Large Group Medical Insurance New Business Submission Guide

Understanding the Employer Shared Responsibility and ACA Reporting

Am I a candidate for a Self-Funded plan?

How will Large Group Health Insurance Plans Look Under Donald’s Trump’s Regime?

Self-Funded Non-Federal Governmental Plans  

The Affordable Care Act has given Americans new rights and benefits, by helping more children get health coverage, ending lifetime and most annual limits on care, allowing young adults under 26 to stay on their parent’s health insurance, and giving patients access to recommended preventive services without cost.

Prior to enactment of the Affordable Care Act, sponsors of self-funded, non-federal governmental plans were permitted to elect to exempt those plans from, or “opt out of,” certain provisions of the Public Health Service (PHS) Act. This election was authorized under section 2721(b)(2) of the PHS Act.

The Affordable Care Act made a number of changes, with the result that sponsors of self-funded, non-federal governmental plans can no longer opt out of as many requirements of Title XXVII.

This section is intended to provide information about this opt out provision. The information in this section will be of interest to state and local governmental employers that provide self-funded group health plan coverage to their employees, administrators of those group health plans, and employees and dependents who are enrolled, or may enroll, in those plans.

Although self-funded nonfederal governmental plans may still opt out of certain provisions of the PHS Act, they are not exempt from other requirements of the law including the restrictions on annual limits and other provisions of the Patient’s Bill of Rights.  Source:

For more information, go to:

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