The rise of stop loss with businesses of all sizes

Calculating stop loss coverage

As we explained in our first post, self-funded health insurance coupled with an Administrative Services Only (ASO) arrangement can offer employers premium savings, flexibility in plan design and enhanced cash flow. But with all of this comes financial risk — that’s where stop loss insurance comes in.

Stop loss insurance covers unexpected or catastrophic healthcare costs that involve one or more employees and is increasing in popularity. This is partially due to the rise in catastrophic claims of $1 million+. And, claims attributed to high cost injectable treatments for cancers and blood diseases are a leading factor.1

Stop loss insurance has caught the attention of small and mid-size businesses as well – businesses who were once not open to exposing themselves to the risk often associated with self-funded medical plans. In 2018, small businesses with self-funded health plans reached 15 percent.2

More on stop loss coverage

Part of stop loss’s growing popularity is connected to the stop loss market’s stability and increase of premium earnings, which offers payers a new opportunity to save.

Employers can tailor the coverage they want by choosing the type of stop loss insurance that works best for them depending on the size of their company and the health, age and needs of their employees.

With stop loss coverage in place, employers can alleviate the risk of high cost claims associated with the top, most expensive conditions, including cancer, blood disorders and chronic diseases.1

Beyond stop loss

While it might sound like the perfect solution for self-funding, there are other cost containment strategies to consider beyond stop loss. That’s where the ASO arrangement comes in. It’s important that employers choose an administrator (often a health insurance company) that offers clinical and pharmacy management. And, one that stays on top of market and industry trends with an eye on new treatments and medicines that might help reduce costs.

Interested in learning more about a self-funded ASO arrangement with stop loss? We can help.

 

Sources: 1. Healthpayer Intelligence. 2. Kaiser Family Foundation, 2018 Employer Health Benefits Annual Survey (page 171) 3. Marsh & McLennan Agency – 2018 Stop-Loss Survey