Other companies accept a group with up to two prior insurers in five years, or in some cases two in four years. F. Financially unstable Nearly a third of small and medium group insurers do not cover groups that are not financially stable. In some cases the analysis can be very detailed. A company that the insurer judges to be financially risky may be asked to provide a letter of credit to cover employer plan liabilities. Nearly one-third of companies take into account the number of employees over the age of 60 when deciding whether to offer coverage.
Some insurers explicitly decline newly incorporated businesses because of high failure potential.
Four small group insurers surveyed, nine medium group and ten large group insurers do not cover employee groups in their first year of operation. J. Large number of low wage employees Twenty percent of insurers will not cover companies that employ a large number of low wage or minimum wage employees. This guideline has a significant impact on service industries, and limits health insurance access for the working poor. If a small company applies for health insurance, the insurer usually either asks each employee to answer medical questions or asks the employer general questions about the employees. Medical under-writing of each covered person becomes less stringent as the group size grows.