To those who carve out dependents


Super Genius
100+ Post Club
Hi all:
I have been reading about all who carve out dependents to individual plans. When I quote group I never carve out individual because it increases the group's rate. The group has less premium dollars to spread over the risk. Also, the only dependents that sign up for group is the sick ones. Thus your initial rate will be higher and your renewal will be pretty high.

So my question is this. Do you explain to the business owner or decision maker that the group rates will be higher because you are carving out dependents and keeping the sick dependents on the plan?

Also, do you quote the group/individual carve outs together against just the group plan? Seems to me this would be fairly complicated.

Nesha Holmes
The rate will only be impacted on small groups. Large groups usually have enough folks left on the plan that there is little or no impact.

If you peel enough off the plan you may have participation problems. You have to balance taking people off with keeping the group intact.

Most employers are not paying any of the dependent cost, so no impact to the employer one way or the other.

The employees who opt for individual coverage are probably younger & healthier so the ones who are left will most likely see their rate increase, but not necessarily. Depends on whether or not there is already a max load on the plan.

If there is a max load the rate could increase slightly if the average age of the group increases.

On the other hand, if an employer is paying 100% of the employee cost (another rarity) and the employee rate is $300 but the new, individual rate is $150, doesn't everyone win?
Point of Clarification:

I only carve out dependents if I have a couple with infants/toddlers, who still want a HDHP plan. I believe, in my heart of hearts, that I am doing a disservice to these people, to have their infants on a HDHP.

Small children need copay plans, because they go to the Dr. more.

As for group coverage I NEVER carve out dependents.
As for group coverage I NEVER carve out dependents.

Why? I can't think of a reason to not carve them out if they are healthy.