What is Medical Underwriting?

One of the major advantages of Group insurance over individual coverage is that it is underwritten at the group level. Everyone in the same class pays the same rate, regardless of the risk they represent, wether they are young or old, healthy or unwell. However, this advantage can also prove to be a restriction when it comes to medical underwriting individuals for coverage under a group plan. Let’s take a closer look.

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Why am I being medically underwritten?

A common question from employees is why am I being medically underwritten? This can be particularly concerning for employees if some members of the group are being medically underwritten and others aren’t.

There are two main scenarios that would lead to medical underwriting on a Group policy:

• Coverage above the Non-Evidence Maximum: When employees are eligible for coverage above the NEM then medical underwriting is required to approve this addition coverage. Note that even if the employee is declined excess coverage for medical reasons they will still have the coverage up to the NEM. Also note that one benefit may be approved while others are declined. For example, a medical condition may pose an unacceptable disability risk, but not increase the risk of death.
• Late enrolee: If an employee chooses to waive all coverage of the benefits plan but later decides to join the plan then medical underwriting from first dollar may be required. This means if the employee fails the medical underwriting they will not have any coverage, even up to the NEM amount. Note that medical underwriting is typically not required if EHB and Dental were waived due to the employee having coverage through their spouse.

An overview of the three outcomes of Medical Underwriting

Types of medical underwriting

There are different levels of medical underwriting, depending on insurance carrier guidelines and the amount of coverage being requested:

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Medical Questionnaire

The simplest form of medical underwriting is the completion of a medical questionnaire. Depending on the answers provided in this form, a medical underwriting decision may be able to be made without any further tests.

Sometimes the answers on this initial form will trigger a more detailed questionnaire. For example, if an employee mentions on their medical questionnaire that they recently had knee surgery, then they may be asked to fill in a more detailed questionnaire specific to knee injuries.

It is important to be truthful on the medical questionnaire. The information provided is often validated with the employees doctor to ensure accuracy. In addition, any future claims may be deemed void if it becomes apparent that the medical questionnaire was not completed accurately.

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Medical exam

A medical exam may be required to complete the medical underwriting process. The usual process is that a registered examiner will contact the employee to arrange a time and place to meet and perform the assessment. This can be at the employees home or at work, or another convenient location that affords suitable privacy.

As part of the examination, the employee will answer a series of questions and their height and weight will be measured. Fluids may also be required as part of this assessment, including urine and blood. More comprehensive tests such as echocardiograms may be required, depending on the coverage being requested.

A final decision can take several days once all the required information has been received.

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Frequently Asked Questions

Here are some questions that employees may ask, and how to answer them:

• I was recently approved for individual coverage, why was I declined for my group coverage?
  For individual coverage, there is an option to ‘rate’ a person depending on the risk they represent. This means older individuals, or those with health conditions, may still be able to get individual coverage, but the rate they pay will be considerably more. For group insurance, rating is not an option. All employees in the same class pay the same rate. The intention of Group medical underwriting is therefore solely to determine if an employee presents a ‘standard risk’.
• I was recently medically underwritten somewhere else for group or individual coverage, can they reuse the tests?
  This may be an option, depending on which tests were performed and when. Check with your insurance carrier.
• My doctor says I am healthy, why am I being declined?
  A doctor typically assesses your health at a point in time. The intention of group medical underwriting is to also consider your future risk. Being medically declined for group insurance in no way implies you are not currently healthy.
• What if I don’t want the excess coverage over the NEM?
  You can choose not to proceed with medical underwriting, but note that you may not have the option to add this additional coverage down the road. You should also ensure that the coverage you have will meet your needs. For example, could you survive for a year if you were unable to work and only receiving 40% of your currently salary?
• I’ve been declined. When can I reapply?
  This is usually communicated as part of the decline letter. It could be an amount of time, or conditional. For example, you may be eligible to reapply in 12 months, or when you have been symptom free for six months. Some conditions may not allow for reconsideration.