Workplace Demographics Impact More Than Health Care Costs

Benefits pros are very familiar with providing census data to health insurers. These census include demographic factors such as age, gender, and geographic location. Insurers use this data to project anticipated health care costs for the upcoming year. Insurers will project higher cost if the data shows that the population is older or has a larger number of females than the general population. Other factors impact the rate insurers charge for health insurance coverage, but demographics play a significant role in setting rates.

On its face it appears that using demographic factors such as age and gender to determine health insurance rates is fair. Older workers and women on average do use more medical services and incur more health care expenses than younger workers and men. However, benefit pros need to be aware that an innocuous practice of determining benefit rates can have legal consequences. They need to understand that discrimination against older workers and women is illegal. And they need to make sure that they advise management not to use insurance data in making employment decisions that negatively impact certain groups.
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