When it comes to buying Health Insurance for your business, which underwriting can you choose? If you have a business with 15 or more employees then you could opt for Medical History Disregarded underwriting. This is also referred to as MHD. If you choose this underwriting type, your policy will cover pre-existing medical conditions.
Why would you choose Medical History Disregarded Underwriting?
When you buy Health Insurance as an individual or SME, MHD underwriting is not available. There are insurers who will offer this to company schemes of 15 or more main members, however it is more common in the larger corporate health insurance market. The risk across multiple employees reduces and therefore becomes more affordable.
The ability to cover pre-existing conditions is a plus point for many. The ability to offer cover of this type to your staff can help you to retain key team members. This may also help you when recruiting, the option to have cover for pre-existing medical conditions could be enticing for candidates.
Please remember that the terms and conditions of your policy regarding chronic condition and general exclusions will still apply.
Does MHD underwriting cost more money?
Yes, it does. The cost for Medical History Disregarded underwriting is more expensive because the risk the insurer is taking is higher. Within your staff members, there could be any number of pre-existing medical conditions. These could include conditions such as cancer, mental health and heart disease which would all have high claim values.
The availability of access to medical treatment for conditions your staff already have may also increase your year on year renewal premiums. If everyone can claim for all medical conditions then the claims experience of the policy may increase.
If you were to have full medical underwriting or moratorium underwriting, this would not be the case as pre-existing conditions would be excluded.
What happens if your company size decreases in numbers?
We never know what the future holds. What happens if you buy a policy on MHD underwriting with 20 members of staff and then have to make people redundant? If your membership numbers fall below the minimum level your current insurer will allow the remaining employees to keep the original underwriting. At the renewal of your policy, you may be advised that any new joiner will only be accepted on FMU or MORI underwriting. This will be applicable until the group reaches the required membership numbers again. You may struggle to obtain a market review for a small group with MHD underwriting. Other providers are unlikely to offer renewal quotations for MHD groups with just a handful of employees.
What happens when you switch provider at renewal?
If you decide you want to change provider at renewal you will need to get quotes on comparable cover. Different insurers have different criteria around MHD underwriting. Make sure that your new provider is offering medical history disregarded underwriting. Other insurers may be able to offer you CPME underwriting if you fall under their minimum number for MHD. In essence, this will carry across your current underwriting but your certificates will show CPME not MHD. In this situation your new insurer may also stipulate that new joiners will need to have FMU or MORI underwriting.
This can cause confusion further down the line if you change insurer again in the future. Providing you keep copies of the certificates that show the original underwriting, you should not have any issues.
What happens if you want to leave a Medical History Disregarded company policy and take individual cover?
MHD underwriting is not usually available for individual or personal policies. When you retire or leave a large company scheme that has MHD underwriting then your current insurer may be the only option if you want to continue your cover. This continuation option will give you peace of mind about pre-existing conditions however, it is likely to be costly.
Depending on your medical history, it might be better to look at new underwriting on a personal basis. If you do not have any significant pre-existing medical conditions then it really is worth reviewing the options from the market as a new customer. You can then review the cover levels, benefits and hospitals to ensure you are not paying for anything you are unlikely to use.
Keeping your current underwriting is important if you are mid claim. If you have treatment planned or pending then continued underwriting may be the best option for you.
Can your broker help you decide which underwriting is the best option for you?
Your specialist health insurance broker can give you the facts which will help you to make an informed decision. Getting quotes on different underwriting methods will help you to see if medical history disregarded underwriting falls within your budget. Your broker cannot make the decision for you, but can explain the implications for the future.
SMP Healthcare Ltd have years of experience in the health insurance market. Our team can provide you with a full market review at the inception or renewal of your company health insurance policy.
Please get in touch for more information:
Telephone: 01245 929129 or 0800 047 0127