Different factors can affect group insurance premiums depending on whether the benefits are “pooled” or “experience-rated”.
| Pooled Benefits |
|---|
| Life, long-term disability, travel, critical illness |
Premiums are affected by demographic and industry-specific factors:
|
| Experience-Rated Benefits |
|---|
| Health, dental, short-term disability |
Premiuns are essentially based on a cash flow formula.
Premiums for the year to come are determined by:
|
Fees are the only variable that can be controlled
It is impossible to control how much participants will claim from a plan.
Once the decision is made to cover a service, participants cannot be prevented from using it. Therefore, the only aspect of a plan’s management that can be controlled are the fees charged to administer it, i.e. how much it costs the plan each time a participant claims for prescription drugs, visits the dentist, etc.
Our fees are lower
Major Group’s fee structure is the best in the market. Our fees are lower than those charged by insurers to administer a plan. Furthermore, having developed our own claims processing platform enables us to very precisely calculate actual trend and inflation factors, as well as the reserves required for each plan, without increasing them to account for the profit margins of insurers.
Combined together, these savings enable us to offer our clients a lower price that can be kept low year after year.