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Life Health > Life Insurance

Big Employers Pin Down Benefits Costs

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Larger groups are having far more success this year than smaller groups at controlling health insurance and life insurance rates.

Researchers at the Council of Insurance Agents & Brokers, Washington, asked benefits brokers about rates for small accounts with 50 or fewer employees, medium accounts to 51 to 500 employees, and large accounts with 501 or more employees.

This year, 23% of the small accounts, 44% of the midsize accounts and 60% of the large accounts are enjoying falling health insurance prices, flat prices or increases of less than 10%, according to the CIAB.

In 2005, only 13% of the small accounts, 28% of the midsize accounts and 47% of the large accounts succeeded at achieving that kind of rate stability.

Meanwhile, despite group life industry concerns about the risks large, concentrated groups may face from events such as natural disasters, large groups also had better luck at holding down group life rates.

In the group life market, at least 83% of the small accounts, 95% of the midsize accounts and 85% of the large accounts are getting lower rates, holding rates steady or experiencing single-digit increases.

The actual percentage of accounts that have reined in group life rates may be even higher, because brokerages could not supply group life rate information for most of the other groups.

Benefits brokers are reporting actual group life rate increases greater than 10% for only 1% of their accounts, according to CIAB researchers.

Although rate increases have been moderate throughout the group life market, large groups are outperforming smaller groups: only 11% of the large groups are experiencing increases of 1% to 10%, compared with 18% of the midsize groups and 19% of the small groups.

Meanwhile, 17% of the large groups are enjoying group life rate decreases of 5% or more, compared with 14% of the midsize groups and just 5% of the small groups.


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