Client Stories | June 9, 2021
Organizations that self-insure their medical and prescription drug coverage recognize the need to have stop-loss insurance as protection against large claims. The ACA’s elimination of annual and lifetime dollar limits more than a decade ago and the steady increase in high-cost claims both underscore the importance of that protection.
Assessing the relative value of a particular stop-loss policy’s coverage can be tough. The best way to make that determination is through seeking regular competitive bids with a range of carriers.
A large organization with 2,500 health plan participants had a medical stop-loss policy with a leading insurance carrier that was up for renewal. The policy had a $200,000 deductible and a “no laser” clause, meaning the policy covered all individuals at that level. (Lasering is an underwriting practice used for self-insured plans that either excludes high-risk individuals who have costly conditions or sets a higher deductible for them.) The policy also had no individual annual maximum and an unlimited individual lifetime maximum.
The organization sought to not only to maintain those terms but also to enhance the coverage — while paying a lower premium.
We recommended a strategy for achieving those important goals.
We proposed a competitive bid. Twelve insurers participated.
Through the competitive bidding process, we identified a new carrier that met all of the client’s current terms. Equally important, the premium was lower.
Additionally, the new carrier offered several considerable advantages over the current carrier, including:
Our client obtained the enhanced coverage it sought at a much better price. In fact, its annual stop-loss premium was nearly 38 percent lower.
The client renewed the policy and received the dividend, but we always look to negotiate the best offer at renewal without regard to any possible dividend.
This page is for informational purposes only and does not constitute legal, tax or investment advice. You are encouraged to discuss the issues raised here with your legal, tax and other advisors before determining how the issues apply to your specific situations.
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