Small Group Claims

Monday, January 04, 2010

I was at a weekly meeting of colleagues this afternoon and as we were discussing various issues that affect the members of the group one member mentioned that he had a good-news bad-news story to relate. It seems that just prior to the holidays he had been offered an opportunity with a small family owned firm. He had met with the family owners and the management team and everyone was very excited to have someone with his particular talents joining the firm. As it turns out, this small firm, about 10 employees, had a high deductible health care plan. At some point during the various interviews and meetings with the owners and the management team he casually mentioned that he has a special needs child. As it turns out one of the owners also had a special needs child. When the family owner-members related this fact to him he interpreted this as very position sign about his prospects with the firm.

Within about 24 hours after his last interview, he did in fact receive an offer from the firm. As he was discussing with his wife whether or not he should accept the offer, he got a call from the person responsible for extending the initial offer and was informed that the offer was being rescinded. When he questioned why the offer was being rescinded he reported that he was given very non-specific reasons. His impression (although no one said so) was that with such a small group and with one special needs child already covered, someone assumed that the firm’s health care costs would increase significantly if another special needs child was added to the group.

Which every position you take relative to health care reform, organizations should not have to make hiring decisions based on whether or not the prospective employee is insurable or that they have family members with special needs. Small group rates are highly sensitive to even one large claim. A special needs child could have a high potential for large claims even over a very short duration. It is well within the realm of possibility that the group’s premiums could have increased with the addition of a second special needs covered member. This individual would have brought significant talents to this small organization and would have helped them grow and prosper in their market segment. While my colleague may have forgone a job opportunity, the firm may have forgone the talent that may have taken them to the next rung in their business plan.