What is medical history disregarded underwriting?

What is medical history disregarded (MHD) underwriting?

A group health insurance plan enables you and your employees to access private healthcare when it's needed most. You can tailor your private medical insurance to give you the right type and level of coverage to meet your needs. With other types of underwriting, any pre-existing conditions will be excluded from coverage. This means that your health insurer will look at your employee's medical history and exclude any pre-existing conditions that needed treatment or advice in the five years before they joined the policy.

With MHD underwriting, there are no medical exclusions, so any previous medical conditions will still be covered, even if your employee had treatment recently.

Who can opt for medical history disregarded underwriting?

MHD underwriting is only offered if you have a group health insurance policy for your business, which means it isn't available to individuals. MHD is also typically unavailable to smaller firms. Most business health insurance is suitable for companies with as few as two employees. However, you'll only be eligible for medical history disregarded underwriting if your business has at least 20 employees. This isn't an unshakeable rule; some insurers will offer MHD underwriting to smaller groups, but it's relatively rare.

What's the difference between medical history disregarded underwriting and other underwriting options?

With MHD underwriting, your employees' pre-existing medical conditions are irrelevant when they make a claim. With other types of underwriting, your insurer will look at any pre-existing conditions for which your employees sought medical advice or treatment in the five years before they joined the policy. These conditions won't be covered for the first two years of the policy but can be added later if your employee remains symptom-free.

This doesn't happen with medical history disregarded policies, as your employees' pre-existing conditions can still be covered. The main difference between the other two types of underwriting is in how information is gathered and how this impacts the claims process.

Moratorium underwriting

When you choose moratorium underwriting, your employees won't need to provide any information about their medical history when they join the policy. This can mean that claims take longer because your insurer will examine their medical records when they claim to assess whether the condition is covered.

Full medical underwriting (FMU)

With FMU, your employees will be asked to provide information about their medical history when they join the policy. This tends to make claims more straightforward as insurers and employees know which pre-existing health conditions are excluded from the start. The premiums also tend to be cheaper than with other types of underwriting.

In another recent guide we explain in detail the differences between moratorium underwriting and full medical underwriting.

Advantages of medical history disregarded underwriting

If your business is eligible for medical history disregarded (MHD) underwriting, it has many benefits for your business and your team.

There's less paperwork

When you recruit a new employee, there's typically a lot of paperwork to complete as part of the onboarding process. With medical history disregarded health insurance, you can take one piece of admin off the list. Your new employee can be added to your private medical insurance and access treatment without needing to provide details of their medical history at any stage.

It's also quicker to claim as all eligible pre-existing conditions are covered.

You can attract the best staff

Private health insurance is a highly valued employee benefit as it enables your staff members to access high-quality private treatment and avoid spending time on an NHS waiting list. In addition, offering health insurance allows you to attract the best talent. With MHD underwriting, you can also be more inclusive to new employees regardless of their medical history.

A medical history disregarded policy offers greater employee confidentiality

Medical history disregarded underwriting also has the advantage of offering a higher level of confidentiality. Whilst you won't have access to any medical information that your employee provides to your insurer, you or your occupational health team will likely liaise with staff during an absence from work. If your employee can't access private treatment, they may need to disclose any pre-existing medical conditions to you to explain why.

Disadvantages of medical history disregarded underwriting

One of the main advantages of a medical history disregarded policy is that you can offer comprehensive cover to all employees, regardless of any pre-existing medical conditions. As you might expect, there are some downsides.

It costs more

One of the main disadvantages of MHD underwriting is the cost. Unsurprisingly, it's one of the most expensive types of coverage in the health insurance market. This is simply because it will increase the number of possible claims, so your insurer needs to cover the additional risk.

It isn't available to smaller businesses

Typically, you'll only be able to take out an MHD policy if your business has at least 20 employees. Regardless of the size of your company, you'll need to give careful consideration to determine whether the higher cost of an MHD policy is financially viable.

It's more difficult to change your insurer

Whilst MHD underwriting covers pre-existing conditions, your health insurance policy will still have some exclusions depending upon the approach your medical insurers take to providing medical cover. Each insurer has its own approach to underwriting, and the cost of your health insurance policy and available coverage will vary between insurers.

If you look at your first-year renewal premiums and decide to look for a better deal elsewhere, your current underwriting may complicate the process. It's possible to switch insurers, but you'll need to check whether a new insurer offers the same level of coverage as your current insurer or has applied new medical exclusions to your policy. Some may decide that they are willing to provide cover but not on a medical history disregarded basis.

What isn't covered

All private medical insurance policies have exclusions that vary by insurer. So, for example, you typically won't be able to get cover for cosmetic surgery, normal pregnancy and childbirth, or treatment for addiction or substance abuse, among other things.

Whilst an MHD policy will cover pre-existing conditions that doesn't apply to chronic conditions. These medical conditions can only be managed rather than cured, such as heart disease, diabetes or asthma. These require ongoing management by a GP or NHS consultant. Medical insurance will only cover acute conditions that can be resolved with a course of treatment. This can mean that acute phases of chronic conditions are covered, for example, if your employee has osteoporosis and suffers a broken bone. Their osteoporosis treatment wouldn't be covered, but surgery or physiotherapy to treat the fracture could be, depending on your policy.

Getting professional advice

There is a wide variety of medical insurance providers, each offering different policies, levels of coverage and underwriting options. Contacting insurers to obtain quotes can be highly time-consuming. Assessing which policy and type of underwriting are right for your business can also be a complex process. Getting professional advice on your options can help you to make an informed decision.

At Globacare, we provide a personal service that helps you to find the right medical insurance policy for your team. Get in touch with us for a comparison quote.