Private health and protection insurance expert and editor
Health insurance with medical history disregarded (MHD) underwriting ignores any pre-existing conditions your employees may have had. With MHD underwriting, your business health insurance policy will cover all eligible conditions, regardless of when symptoms began.
Before we get into the detail of medical history disregarded (MHD) underwriting, we should explain what pre-existing medical conditions are and how they typically affect health insurance policies.
A pre-existing medical condition is any illness or symptom you or your employees had before taking out a health insurance policy. This could include something you needed treatment for or discussed with your GP to ask for their advice. Broadly speaking, If there's a note of it in your medical records, it'll be classed as a pre-existing condition.
Most private health insurance policies exclude pre-existing conditions; however, in some cases, if you don't suffer symptoms nor need medical assistance for two years, they can be included on your policy.
If you are an employer with at least 20 employees, you may be able to opt for specialist health cover with medical history disregarded underwriting. As we outlined at the start of this article, MHD underwriting effectively ignores your employees' pre-existing health conditions and gives the most comprehensive cover available.
It could be that a number of your staff had some serious illnesses in recent years. They would be excluded with a conventional health insurance policy and underwriting, but with medical history disregarded underwriting, they'd be covered (assuming they are eligible).
By comparison, both moratorium underwriting and full medical history underwriting would require the examination of your employees' medical histories at some stage.
If you have moratorium underwriting, your insurers will look at their medical records when they claim to see if they'll provide cover. This can mean that processing claims take longer because they need to investigate. With full medical underwriting, they'll need to supply details of their medical history when they join the policy.
Your employees' pre-existing conditions are irrelevant with a medical history disregarded policy.
It's important to remember that while pre-existing conditions are covered, there will still be some exclusions that apply regardless of the type of underwriting you choose. There is a range of medical insurers in the health insurance market. Each has its list of medical exclusions and treatments that they don't cover. These typically include pregnancy, cosmetic surgery and treatment for addiction. Experimental and unlicensed medical treatment is usually unavailable too.
Private medical insurance is designed to cover acute conditions that can be resolved with a course of treatment, and this applies to MHD underwriting too. If your employees have chronic health conditions that need ongoing management, they won't be covered by your health insurer. This includes medical conditions such as diabetes, asthma or angina. If acute symptoms arise because of a chronic condition diagnosed before you had business health cover, these won't be covered with other types of underwriting, but they will be under an MHD policy.
MHD underwriting allows you to offer comprehensive health insurance coverage to even your highest risk staff members. Here are just a few of the benefits:
The biggest benefit of MHD cover is that it covers all eligible pre-existing conditions. For many employers and employees, this is huge, as usually private medical insurers exclude pre-existing medical conditions.
Chronic conditions aren't covered by health insurance, even with a medical history disregarded policy. However, if an employee with a chronic illness suffers from another related condition, they'll be able to get private treatment. This makes life better for both of you as they can recover more quickly, and you can spend less time monitoring and managing absences from work.
If you're able to offer the most comprehensive medical cover via a company scheme, this will help you to attract and retain new talent. That's particularly important when we're in a jobseeker's market. Your staff can get medical appointments or access diagnostic tests flexibly at a time to suit them, so trying to get treatment is less stressful.
With MHD underwriting, your staff won't have to provide details of their medical history even when they make a claim, as your insurers will offer cover regardless. It allows them to maintain confidentiality in more ways than one.
With a moratorium plan, group members make a claim and wait to see if it's approved. If you have full medical underwriting, they'll already know whether a particular condition is covered. Either way, they may find themselves in a position where they're reporting an absence to you and having to explain why they have to wait for treatment via the NHS. With an MHD policy, they can get on with arranging private treatment.
Medical history disregarded means less form filling to do, both for you and your employees. They don't have to provide details of their medical history at any stage, which will also mean less paperwork for you, depending on how you administer the policy. If you're creating a company policy from scratch MHD underwriting makes it quicker and easier to do.
The claims process is also quicker and simpler as your insurers don't have to examine your employees' medical history before making a decision.
Offering a medical history disregarded group health insurance plan might sound ideal, but there are a few downsides.
The underwriting process for MHD is complex as a policy might cover everyone from a weekend triathlete to a smoker with a history of heart disease. A policy of this type allows you to offer coverage to employees who may have a long history of ill health, so it needs to factor in a wide range of risks. As a result, you'll pay a higher cost for coverage than you would with a different type of underwriting.
Whilst this isn't set in stone, your insurer will usually only offer you MHD if you're a larger business with a minimum of twenty staff members, so it isn't available for small businesses looking for health insurance. That's because it allows your insurer to spread the risk over many members, while smaller groups carry an increased risk that more people will make a claim.
An MHD policy still has medical exclusions, and different insurers each have their own approach. If you have an existing policy, your current underwriting will have been carried out by your current insurer following their processes. This could make it more difficult for you to switch to a new insurer. You may look at your first-year renewal premiums and look for a better deal elsewhere, only to find that other insurers apply a different process and new medical exclusions.
MHD underwriting is excellent for employee equality as it allows you to offer superb health insurance to all of your employees regardless of any pre-existing medical conditions they may have. Even if they have an individual policy, your group scheme will likely offer them more comprehensive coverage without exclusions. It could also save you time administrating a larger scheme, so it's worth careful consideration.
However, it is more expensive than other types of underwriting and may make it more difficult for you to switch to a new insurer in the future.
If you're looking for private medical insurance to offer to your employees, it's a good idea to get advice that's tailored to your needs. Whilst medical history disregarded underwriting will provide excellent cover, you may find that there's a more cost-effective way of providing your employees with superb cover.
Disclaimer: This information is general and what is best for you will depend on your personal circumstances. Please speak with a financial adviser or do your own research before making a decision.
Chris Steele is myTribe’s resident expert in private health insurance and healthcare, with over a decade of experience in the field. As a Chartered Insurance Institute (CII) qualified professional, he has helped countless consumers navigate private medical insurance. Regularly quoted by national media, Chris is a trusted voice in the UK insurance industry, with his insights featured in leading consumer finance publications.
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