It is always better to get your group health insurance with companies that “pool” their small groups. Some companies put all of their small groups into a “common pool.” This pool may consist of 30-40 small organizations. The advantage is that if one of the small groups has a major medical problem, e.g. a cancer, the medical cost for that cancer is spread throughout all the organizations in the “pool.” Thus the medical increases at renewal time are much more minimal.
If a small group of say 10 employees is insured outside a “pool” and one of the employees has a cancer surgery that costs $200,000, the insurance company will need to make up that loss by raising the rate on the small group. That rate increase could be 100% or more. Thus if insurance was costing $400 a month for a family, at renewal time it could end up being $800. If the organization was insured by a company that “pooled” small groups the rate increase might be 20% or an $80 increase in the monthly premium.
When looking at group health insurance it is wise to ask, “Will my organization be included in a pool with other small organizations?” For information on companies that “pool” small group email us.