As a business owner or HR manager in Arkansas, choosing the right health insurance plan for your employees can feel overwhelming. One term you may encounter during the quoting process is medical underwriting. But what exactly does it mean, and how does it impact the coverage and rates your company is offered?
This article breaks down what medical underwriting is, the tools and data underwriters use, and why some health plans require it—while others do not.
What is Medical Underwriting?
Medical underwriting is the process health insurance carriers use to evaluate the health risk of a group of employees. By assessing health information, underwriters can predict the likelihood of claims and set premiums that reflect the risk of covering that group.
While the goal is the same—pricing a group health plan accurately—carriers use different tools and data sources to get there.
Tools and Methods Used in Group Health Underwriting
1. Traditional Medical Questionnaires
Historically, insurers relied on detailed health questionnaires completed by employees. These asked about:
- Current medical conditions
- Prescription drug use
- Prior hospitalizations and surgeries
- Lifestyle factors (such as tobacco use)
This method provides direct health data, but it can be time-consuming and intrusive for employees. Today, many carriers prefer faster, data-driven alternatives.
2. GRx (Group Prescription Data)
GRx—short for Group Rx—uses aggregated prescription drug history to assess group health risks. Carriers analyze the types of medications employees are filling to estimate the prevalence of chronic conditions (like diabetes or heart disease) within the group.
- Advantages: HIPAA-compliant, no individual health disclosures, faster turnaround.
- Use Case: Common in level funded and self-funded health plans where carriers want a reliable risk snapshot without lengthy questionnaires.
3. CURV (Milliman IntelliScript)
CURV is a more advanced tool that builds on GRx by using a wider range of data:
- Prescription drug history
- Medical claims data
- Electronic health record (EHR) data
With CURV, underwriters can create a risk score for a group, identify potential high-cost claimants, and make more precise pricing decisions.
- Advantages: More accurate than GRx alone, faster quoting process, while still remaining HIPAA compliant.
- Use Case: Widely adopted by national carriers and stop-loss insurers for groups of all sizes.
4. Tech-First Underwriting
Some newer carriers, like Angle Health, have introduced digital-first underwriting models. Instead of using health questionnaires or Rx databases, Angle utilizes a group census and leverages data from integrated systems like payroll, HR software, and pharmacy benefit managers (PBMs) in order to more accurately predict risk and set premiums for group health plans.
Their approach blends technology, AI-driven analytics, and ongoing member engagement to refine risk and manage costs over time.
It is important to know that not all health plans require medical underwriting.
Affordable Care Act (ACA) compliant “metallic” plans (Bronze, Silver, Gold, Platinum) do not require underwriting. Premiums are based only on census level demographics such as:
- Age
- Location of employee or business
- Family size
- Gender
This means businesses can receive ACA-compliant group health quotes without providing any medical history or pharmacy data.
Important note: Medical underwriting is not required for a business to offer employee benefits. Many Arkansas employers successfully provide ACA-compliant health plans and other employee benefits without undergoing underwriting.
Why Medical Underwriting Matters
Understanding medical underwriting helps you as a business leader:
- Set expectations for the quoting process
- Understand why rates differ between carriers and plan types
- Decide between ACA-compliant plans vs. level funded/self-funded plans that may require underwriting.
In short, medical underwriting is simply a tool carriers use to balance risk and cost. Whether or not it applies to your business depends on the type of plan you choose.
Final Thoughts
Medical underwriting may sound complicated, but it’s just one of several ways health insurance carriers assess risk when pricing group health plans. Whether you pursue an ACA-compliant plan without underwriting, or explore level funded options that use GRx, CURV, or newer tech-driven models, the most important step is having a trusted advisor to guide you.
At Stepka and Associates, we specialize in helping Arkansas business owners and HR managers navigate these choices. Contact us today to speak with an expert and find the right health insurance solution for your company.