Medical Expense✓ Verified · outline & fact-checked · Sep 2026Difficulty 2/5
When underwriting a large group medical plan (generally 101 or more employees), an insurer most commonly:
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
Large groups are generally experience-rated: the premium reflects the group's own claims history, industry, demographics, and plan design, because the group is large enough for its loss experience to be statistically credible. By contrast, small groups are typically community-rated with limited variation. Experience rating rewards good claims experience with lower rates and gives large employers a direct interest in managing utilization and wellness.
Why the other options are wrong
- B) Charging one community rate to all groups is the small-group rating model, not the large-group model.
- C) Employees are not individually underwritten under group coverage; the group as a whole is the rated unit.
- D) Commercial group rates are set by insurers through state-regulated rate filings, not by a federal formula.
Memory hook
Large groups get experience-rated — your own claims history sets your rate.