Difference between Small Group (<50) and Large Group (>50) Health Coverage

Group health insurance is employer-sponsored health coverage for business owners, employees and often for dependents. There are differences between small groups (defined as companies with 50 employees or less) and large groups when it comes to the application process, enrollment procedures and other factors. These are the most important differences:

1. Application: small group plans are filed with the state by the carriers. There are no options to deviate from plans with small group coverage. Large group plans can be personalized on an individual client basis.

2. Rates for large groups are composite rated; all employees are put together in a group and the carrier comes up with one rate for the entire group. Small groups rates are based on an individual employee basis: age, location and other factors determine the rate for each employee.Rates for large groups are market driven, small group rates are pre-determined.

3. Acceptance: carriers will not decline a small group based on health risk, however can decline if no employer-employee relationship can be established. Large group coverage can be declined for any number of reasons.

4. The enrollment process is technically the same for small and large groups; however the application forms are different. Currently, there is a paper enrollment process for both small and large groups.The administration between small and large groups is the same; although large group administration is more time-consuming because of the size and therefore takes longer to process.