Medical Expense✓ Verified · outline & fact-checked · Sep 2026Difficulty 2/5
Underwriting for a large group (101 or more employees) relies most heavily on:
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
For large groups, the insurer prices coverage primarily on the group's own claims experience, industry classification, and demographic characteristics such as age and gender distribution. Because the group is large enough for credible loss data, individual medical underwriting is neither necessary nor permitted. This is a distinct underwriting approach from small groups, where community rating and guaranteed issue dominate. The distinction is covered under the large-group underwriting considerations in AH-III.B.2.
Why the other options are wrong
- B) Large groups are not underwritten on each employee's medical history; experience rating uses group-wide data.
- C) The owner's history is immaterial to pricing a large group; group experience determines the rate.
- D) Credit scores are not a basis for rating large group health coverage.
Memory hook
Big group, big data: the group's own claims set the premium.