Spring 2006 / No. 67
Group vs. individual—is there
a need for distinctions?
We have written on many occasions about the blending of group
and individual plans in the worksite business. Every rule about
the characteristics of a “group” or “voluntary” product
or an “individual” or
“worksite” product has fallen to the wayside. For
example, group products are portable and can pay heaped commissions,
and group carriers take responsibility for employee-level record
keeping. On the individual or worksite side, guaranteed issue
underwriting is readily available, commissions can be level or
heaped, and enrollment methods include Internet, call center,
and group meetings. It often seems that the only part that hasn’t
changed is the legal or regulatory aspect of group vs. individual.
Yet despite this, many carriers still want to make distinctions.
For example, while conducting our annual Worksite Sales Survey,
we had several calls from carriers wanting to know how we were
defining group and individual in our survey. (We typically report
the filing category in the report.) More than one of those who
called said they classify products based on items other than
the filing category. One uses the sales approach while another
said they consider
“hybrid” products (those filed on a group platform
but administered as though they are individual) as individual.
All of this makes us wonder, do we still need to make any distinctions? |
