Which type of employer is more significantly affected by risk selection among employer groups?

• A. Small employers with a single health plan
• B. Large employers with multiple health plans
• C. Employers offering only traditional health plans
• D. Employers who do not offer health benefits

Answer: (B)

Large employers with multiple health plans are more significantly affected by risk selection among employer groups due to the greater diversity in their employee demographics and health needs. With multiple health plans, larger employers can experience a wider variance in the risk profiles of their employee populations across different plans. Some plans may attract healthier individuals, while others may attract those with higher healthcare needs. This selection effect can lead to considerable disparities in claims costs and can impact the overall stability and pricing of the health plans offered.

In contrast, small employers with a single health plan might have a more homogeneous group, leading to less risk selection because their employee pool does not have as much variance in health status. Employers offering only traditional health plans may also limit the diversity in risk profiles since these plans might not appeal to a broader range of health statuses. Employers who do not offer health benefits face no risk selection issues, as there are no health plans to consider. Hence, large employers with multiple plans are the most affected by the nuances of risk selection.