The 3 Keys of Stop Loss Insurance (Video)

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“Stop loss carriers are definitely not the same,” said Jeff Thornburg, Senior Manager for MedCost Underwriting. “Stop loss insurance should not be treated as a commodity. Price is important. It should be considered. But the quality of the carrier and their policy are actually more important than the price.

“As long as you are getting a good price, you want to drill down into the policy. The first key is:

1. Be sure your policy is going to mirror, or virtually mirror, stop loss carrieryour plan document, to avoid any gaps in coverage.

“When there’s a gap, there’s a denial. You might as well consider denied claims as additional premium. So if you bought the cheaper policy that had more exclusions, and you had a denial, you quite possibly ended up paying more than if you had just bought good quality stop loss from a good quality carrier.”

Senior Underwriter Jeff Woodburn explains the second key: look for these qualities to choose the best carrier.

2. What differentiates the good stop loss carriers from inferior ones?

             *Financial stability
             *The ability to be efficient in paying claims
              *Ease of doing business

“For example, a premature baby incurs a tremendous amount of expense,” said Mr. Woodburn, with over 10 years in the industry. “As you know, that is a totally unexpected expense. But when these unexpected events occur, that is when your stop loss insurance kicks in to cover expenses that exceed a certain threshold. This threshold is predetermined when we’re putting the health plan together for a prospective group.”

Mr. Thornburg has seen how important the third key is from his 28 years handling stop loss insurance.

3. Choose your benefits administrator wisely.

“As a self-funded employer, you’re going to have the same claims, regardless of which stop loss carrier you choose. Your claims are going to happen whether you are with Benefits Administrator A, B or C.

“In evaluating different benefits administrators, it’s important to nail down who is going to manage those claims the best. To limit the liability of the employer while still giving good service and excellent benefits to the employees.

“This is what it comes down to at the end of the day. Who is going to best manage your claims?”MedCost

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How to Save on Employer Health Plans


Stop Loss Insurance Protects Self-Funded Plans from Large Claims

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As the cost of health care continues to rise, many businesses are exploring self-funded health plans as a way to gain control of costs. Employers who designate funds to pay their companies’ health claims buy stop loss insurance to protect assets in the event of catastrophic claims.

 MedCost is offering a free white paper, explaining how stop loss insurance works. Here is an excerpt describing how employers can maximize benefits while minimizing risk:


TWO TYPES OF STOP LOSS COVERAGE

Specific (or individual) stop loss insurance limits the self-funded employer’s liability to a predetermined dollar amount (specific deductible) for each employee covered under the health plan. The specific deductible per employee is determined by group size and risk tolerance.  Stop Loss Insurance

Aggregate stop loss insurance limits the self-funded employer’s overall liability. Maximum liability is determined by projecting expected claims plus a margin (typically 25%). If paid claims exceed 125%, the stop loss carrier reimburses the amount above the maximum liability. Individual claims that exceed the specific deductible do not accumulate toward the aggregate. Only claims up to the specific deductible apply to the aggregate deductible.

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The Stop Loss Coverage white paper answers key questions on how to choose the best stop loss partner, strategies for rewards versus risk, contracts and more. For a free copy of the stop loss white paper:

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