Read more in this Business Tip. Making decisions about deductibles and risk tolerance are tough when so many factors are in play, and when multiple decision makers have to weigh in. Free Online Library: Stopping the loss: a surprising mix of insurers and reinsurers are working behind the scenes to improve health care and reduce catastrophic medical claims. The remaining 41% of employers placed coverage with outside stop-loss carriers, with the top carriers being Tokio Marine HCC, SunLife and Optum.Individual stop-loss deductibles vary significantly even between like-sized employers. Stop-loss insurance (also known as excess insurance) is a product that provides protection against catastrophic or unpredictable losses. Last year we published our inaugural Stop-Loss Survey, which allowed employers and their advisors to more accurately benchmark deductibles and premium levels based on peers of similar size and geographic area. For more and more employers, the time is right to consider self-funding their benefits. This field is for validation purposes and should be left unchanged.This field is for validation purposes and should be left unchanged.Employers are looking at an uncertain future as they mitigate the current pandemic crisis on top of predictive numbers of health insurance costs in 2021.
Overall the average specific deductible was approximately $168,000.Many employers who prefer to keep their individual stop-loss deductible down but are willing to accept additional risk for potential savings are including aggregating specific deductibles with their current policies. You’ve got to do both and, unfortunately, neither challenge is likely to disappear anytime soon. It is purchased by employers who have decided to self-fund their employee benefit plans, but do not want to assume 100% of the liability for losses arising from the plans. Ideally, this rate of increase should be capped.Also important is the carrier’s freedom to “laser” some employees. Increasing your plan’s deductible allows you to budget medical costs with greater accuracy.We know that stop loss insurance coverage can be confusing, and making the right decisions about your plan is daunting. In the event that expected claims are set unnecessarily high, the likelihood of an aggregate claim decreases in some cases to nearly 0%, providing little to no coverage with unnecessary premium expense.Aggregate premiums are often quite low as compared to their specific counterparts; however they can vary significantly due to the very small likelihood of a claim in any given year. The stop loss provider’s portion of the bill is $40,750. A stop-loss order is an order placed with a broker to buy or sell a security when it reaches a certain price. Insurance companies themselves, as well as self-insuring employers, purchase stop-loss coverage for a premium to protect themselves. The issues addressed may have legal or tax implications to you, and we recommend you speak with your legal counsel and/or tax advisor before choosing a course of action based on any of the information contained herein.Changes to factual circumstances or to any rules or other guidance relied upon may affect the accuracy of the information provided. Smaller employers will assume ownership—or co-ownership—of their health insurance stop-loss risk.
MMA and MMA Securities are affiliates owned by Marsh & McLennan Companies.Copyright 2020 Marsh & McLennan Agency LLC. pecific and aggregate stop loss insurance (reinsurance) is a product that has unique characteristics. At levels higher than this, employers primarily chose not to purchase aggregate coverage, as they are likely more immune to the impact of annual fluctuations in claims and may have more historical experience and reserves built up.To ensure appropriate aggregate coverage, it becomes increasingly important that employers ensure that expected claims are set appropriately when applying the aggregate corridor. According to A self-insured group’s costs can balloon quickly when the deductible doesn’t keep pace with the medical trend rate. With this in mind, the best thing our industry can do for our clients is continuing to educate ourselves on these trends and inform them on changes that could affect their health insurance needs.BCS is dedicated to providing best in class Stop Loss products and sharing our expertise with our partners. According to analysts at PwC’s Health Research Institute, “there’s so much uncertainty because of the COVID-19 disruption that it’s difficult to pinpoint whether medical-cost trends will be significantly lower or higher next year”. This phenomenon is what’s called leveraged trend. Specific to the staffing industry, Auto Liability and Employment Practices Liability have been loss leaders and carriers are not collecting enough premium to cover the cost of claims. The amount covered by the deductible didn’t change, but the portion covered by the stop loss carrier increased by 63% in one year. The stop loss carrier’s portion of the procedure would be $30,750, which is a 23% increase from 2017 – but it’s significantly lower than the 63% increase that was incurred when the deductible remained unchanged.As the two example cases demonstrate, a plan’s deductible plays a significant role in determining the leveraged trend rate for a specific claim.That’s why it’s so important to make informed choices about deductibles for your stop loss coverage.