The Hidden Cost of Hiding an Ongoing Serious Health Condition When Quoting Group Health Insurance
It’s an increasingly common situation given the increase in cancer cases these past few years – it’s renewal time for your group health insurance plan and one of your staff members has an ongoing serious health condition, which could be cancer, or another long-term illness requiring regular medical care. Your insurer is quoting a massive increase to cover this going forward.
In an effort to find an option within budget, getting quotes from the market is a sensible next step. But now you’re facing a difficult choice: Disclose the condition, or don’t mention it and hope for a better quote.
Here’s what you need to know: Disclosing is not optional. It’s mandatory. And trying to hide it will cost you far more than the premium increase ever would.
The Importance of MHD Underwriting
First things first – if you are considering a switch of insurance provider, you can should only do so under MHD (Medical History Disregarded) terms. This means the new insurer agrees to cover all pre-existing conditions without exclusion, regardless of medical history. MHD underwriting protects your company and your staff by ensuring that the condition is covered from day one, with no surprises or exclusions down the road. When you’re shopping for a new insurer or negotiating with your current one, you must insist on MHD terms. Anything less means you haven’t actually transferred the risk – you’ve just bought a policy with a massive question mark hanging over it.
READ MORE >> When Full Health Insurance Cover for Pre-Existing Medical Conditions Doesn’t Mean Full Cover
READ MORE >> FMU vs. MHD: What’s the Right Underwriting Approach for Your International Health Insurance Plan?
Group Health Declaration Is Non-Negotiable
Even if signing up under MHD terms, every tier-A insurer will have a group health declaration as part of the group health application form. Here’s an example of what that looks like:
Insurers don’t require you to give names or share medical reports. But you will have to complete this form. There is no way around it. When you sign it, you’re certifying that the information is accurate. If you answer “No” to a question when the answer is actually “Yes,” you’re failing to disclose key information on an insurance application form which is obviously a major issue.
Here’s what happens when an insurer discovers you disclosed information: They can deny claims related to that condition. They can void the entire policy. They can refuse to renew. The staff member with the condition gets no coverage. The company is now liable for all medical costs (potentially for all staff) out of pocket.
That’s not a price problem. That’s a failure of risk management.
The Math Doesn’t Work in Your Favor
Let’s do the actual math on what happens when you try to save money by not disclosing.
If you disclose up-front, the premium is usually higher (but not always) because the insurer knows about the condition. But cover is real. Claims get paid. Risk is transferred from the company to the insurer. You pay more, but you have genuine protection.
If you don’t disclose, the premium might be lower initially. But if the insurer discovers the condition – whether through claims, medical records, or routine investigation – they deny claims or void the policy. The company has to pay out of pocket for the staff member’s treatment. You saved money on the premium and lost it all on medical costs.
Which is actually cheaper? It’s not even close. Disclosure is always cheaper in the long-run.
What You Should Actually Do
At renewal, you have two realistic paths. The first is to get quotes from other insurers. Disclose the condition up-front to multiple insurers. Get quotes that actually reflect your real situation. Compare them. Choose the best option.
The second path is to negotiate with your current insurer. Work with a professional broker to negotiate the increase down. Find a price that fits your budget. Stay with the insurer you know.
Coverage for That Staff Member Is Non-Negotiable
Let’s be clear about something: Coverage for the staff member with the ongoing condition is non-negotiable. That person is part of your community. They’ve been diagnosed with a serious condition. They need medical care. Your job as a business leader is to ensure they have it.
Yes, this might increase your premium. But the alternative – leaving them without coverage – is obviously unacceptable. The question isn’t whether to cover them. The question is how to cover them within budget. And that’s where disclosure becomes essential. Because when you disclose up-front, you can shop for the right insurer and the right price. When you hide it, you’re gambling with your staff member’s health and your company’s finances.
Why the Right Broker Matters
A bad broker will tell you not to worry about disclosing. They’ll say they can get you a good quote without mentioning it. They’re not protecting you. They’re trying to win your business by telling you what you want to hear instead of what you need to hear.
A good broker will tell you the truth: Yes, this condition will affect the premium. But here’s what we can do: we can help you get quotes from the market, find insurers who can cover it properly, and negotiate to keep the increase within budget. Or we can work with your current insurer to negotiate them down. Either way, we’ll get you genuine coverage that actually protects your staff.
The difference between these two approaches is everything.
When you face a massive renewal increase due to an ongoing staff health condition, your instinct might be to hide it and shop for a better quote. Don’t. Every insurer will ask about it on the application form. If you lie, the coverage becomes worthless. That’s far worse than a higher premium.
Instead, disclose up-front. Either shop the market with full transparency or work with a broker to negotiate with your current insurer. Either way, you’ll get genuine cover that actually protects your staff when they need it. That’s what insurance is supposed to do.
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