They don’t think about their plan structure and the impact of their claims.

Some group insurance plans are ‘Experience-Rated’ and some are “Pooled”. Let's take a look at the difference.

What are ‘experience-rated’ plans? 

Experience-rated plan works a lot like car insurance. What do you think would happen to your price next year if this year you get into three car accidents and get five speeding tickets? Your price would jump through the roof! You’re a major risk and submit a ton of claims! Well, Experienced-Group insurance plans can work in a similar fashion. When your employees submit claims, your price will rise at renewal.

What are ‘pooled-plans’?

Pooled-plans work how you imagine insurance companies should work. Where everyone shares in the premium and shares in the risk. Simply, you choose from some standard plan designs. The price is fixed for that plan. And regardless of your usage, you get the same renewal as everyone else. The insurance company won’t single you out for your claims. 

Which do you think will achieve more stability?

(A) The one that will fluctuate like a rollercoaster when your employees or their families submit claims.

(B) Or the one that has a larger group of clients sharing and a history of stability?