Limit your risk on self-funded plans
What is Stop Loss Insurance?
Stop loss is a tool used in self-funded insurance plans to reduce the overall liability of claims. Self-funded plans are when the employer takes on the financial risk for providing health care benefits to employees instead of the insurance company. The employer then is responsible for the claims costs by all employee and plan members. the employer's plan is usually administered by a Third Party Administrator (TPA) that manages medical claims, establishes a provider network, and more. the employer can utilize numerous tools, including stop loss insurance, to help manage total losses by improving their ability to lower plan premiums and costs.
How does stop loss insurance help my client?
The ability to provide competitive stop loss insurance is very important in determining your client's ability to self-fund. Since your client is taking on the financial risk for the medical claims, some of their main concerns will be individuals with catastrophic claims and their employee's combined use of the health plan.
Stop loss insurance is built to cover catastrophic claims that exceed your client's per-determined risk tolerance. Stop loss insurance is available in Individual (Specific), which covers catastrophic losses on each individual insured under the health plan, and Group (Aggregate), which provides additional protection for self-funded health plans designed to limit the plan's maximum financial risk.
Should my client consider self-funding?
Not every employer is right for self-funded insurance. A common misunderstanding is that self-funding is only for large employers. Self-funded insurance plans can be set up by smaller employers as well. There are no rules to follow to determine if your client is right for a self-funded plan. The best way to determine if your client can benefit from self-funding is to analyze their existing health plan and recent claims.
Our expert team can help you with analyzing and determining if your client is a good candidate for a self-funded plan.