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2 person group rates in Pa are thru the roof. The ins co's arent stupid. They know whats up. Anybody forming a 2 person Group Health policy has some serious pre-ex going on or just fell off a turnip truck.
Very true, adverse selection. In CA, groups 2-50 are regulated by state law (AB 1672) and, as such, enjoy a maximum rate up of 10% above standard cost. If they qualify (there are rules of qualification), they can't be denied and cannot be charged more than 10% above standard cost. This only applies to initial enrollment, not necessarily changes made at renewal.
When AB 1672 came out agents decried it as the end of the small group health market and lots of other doom and gloom. So far, 20 years later, it has actually worked pretty well. FWIW.