[jrmski]

Large employers are often self-insured. But since they lack the expertise and large network of negotiated rates and providers, they typically hire a company in the insurance business to administer their plan. Thus, the employer bears the risk of the claims, and also is the party that benefits when expenditures are reduced.

[jabroni_salad]

.... which leads to excellent situations where employers try to get rid of employees who have expensive health problems. Especially if a smaller employer is self-insuring because a decision maker read some blog post about it and thought it sounded neat.

Sorry about the cancer!! please go die somewhere that I cant see it thanks.

[toast0]

If the employer doesn't self insure, then their insurer will raise their rates because their employees have a history of expensive health problems. Which still leads to pressure to get rid of those employees. (Unless the employer based coverage is priced like marketplace plans, where only age, sex, and smoking are available to set prices; but I don't think that's the case for most?)

[lotsofpulp]

> then their insurer will raise their rates because their employees have a history of expensive health problems

This is illegal since 2011 due to the Affordable Care Act.

The only factors allowed to price insurance is age, location, and tobacco use.

https://www.healthcare.gov/how-plans-set-your-premiums

Even the age factor is bounded by the highest risk age having to be only 3x the lowest risk age (i.e. a subsidy from young to old). The lack of ability to price based on pre existing health conditions is a subsidy from healthy to sick.

And for political reasons, we can afford to discriminate against tobacco use, but not sugar or alcohol or sat fats or lack of exercise.

[toast0]

Does that page apply to employer based plans? It's not clear that it's not just discussing marketplace plans.

[chimeracoder]

> Does that page apply to employer based plans? It's not clear that it's not just discussing marketplace plans.

It applies to all non-Medicare, non-Medicaid, non-grandfathered[0] plans for people under the age of 65.

Ironically, once you turn 65, all bets are off: insurers can factor your age into your premiums, and people often get a massive rate hike then (usually prompting them to switch to Medicare).

[0] A small percentage of employer-provided pre-ACA plans are grandfathered in, but they're few in number and decreasing over time. If you have a grandfathered plan, you probably know it, because it's required to be disclosed visibly in the plan documents when you enroll.

[ecommerceguy]

>>The only factors allowed to price insurance is age, location, and tobacco use.

Not necessarily.

Self funded plans are underwritten. Fully Insured over 50 fte plans are underwritten. A carrier will underwrite based upon Medical History. Individual Short Term Medical plans are also underwritten.

>>It applies to all non-Medicare, non-Medicaid, non-grandfathered[0] plans for people under the age of 65.

Incorrect, see above.

>>Ironically, once you turn 65, all bets are off: insurers can factor your age into your premiums, and people often get a massive rate hike then (usually prompting them to switch to Medicare).

Again, not necessarily, Nearly all Americans over 65 have Medicare, as part A is required. The States regulate these plans so each state may be different in some way. Medicare supplements are often underwritten, but can be guarantee issue, again depends on the State.

>>A small percentage of employer-provided pre-ACA plans are grandfathered

Correct, these are getting priced out. They are underwritten. If you are on a GF/GM plan, then switching to LFP or similar is likely a smart move.

[ecommerceguy]

>>Which still leads to pressure to get rid of those employees.

Can you give a source to this statement or is this an ad hominem?

>>but I don't think that's the case for most?

Great question, generally the larger the company the better the case for self funding. Keep in mind there are different types of self funding, such as graded funding and level funding. Most employees on employer based health insurance are likely to be on a self funded chassis however that is changing. Not all states provide that data, without that, it's hard to pinpoint an exact number of how many is on what chassis.

[ComputerGuru]

I don’t believe insurers have that kind of “dynamic pricing” where the rate you pay changes depending on who you retain and who you let go.

But my experience is with a large insurer and a school with a hundred or so employees, not something on Microsoft’s scale.

[ecommerceguy]

That is illegal and if you know of that situation I implore them to seek council and contact the DOL.