Rate guarantees means rates are frozen
for a certain period of time.

Group insurance carriers offer a rate guarantee within their contracts. This is the period of time that the insurance company guarantees to the employer that there will not be an increase in the final premiums determined during the underwriting process. The total cost to the employer will increase if there are new employees added to the group plan, but not by more than the rates given to the employer at the time of enrolment or renewal. The employer will be provided a complete set of rates for all age classifications, including those for employees and spouses, employees and children and employees and families. Any new employee may not increase the total group premium by more than the amount set forth in these rate charts.

Most insurance companies offer a rate guarantee of 12 months, but some offer up to 16 months, while others may offer no guarantee at all. Insurance companies that offer a rate guarantee cannot change the group premium until the end of their promised guarantee. Prior to this increase, the insurance company will notify the employer of the new rates, usually at least 30 days prior to the increase. This gives the employer the opportunity to explore other options if the new rates are unacceptable.

Unlike individual health insurance, group insurance is not individually underwritten. The insurance carrier buffers this risk by examining claims of the group during the policy year. Other factors also influence the group premium, including the size of the group and the participation levels of individuals within those groups.

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