In part one of this two-part post, we discussed how changes within the last few years have led to employers exploring their options when it comes to saving money and increasing flexibility and options for their health insurance. This is where self-funded healthcare plans come in. Additionally, we touched on the downside to self-funded plans is that employers assume a large amount of risk that otherwise is nonexistent while traditional plans, as well as the cost of prescription drugs that are constantly rising.
A stop-loss insurance plan with a combination of both aggregate and stop-loss adds a layer of protection that isn’t otherwise there with self-funded plans. In this post, we will discuss further considerations for employers that have self-funded healthcare plans that could help them save time, money as well as alleviate headaches.
Further Considerations for Self-Funded Sponsors
Perhaps the best place to start when evaluating options for self-insured employers is to understand the premiums and the protections that come along with their insurance. This includes both the limits and the flexible options that come along with this. For the purposes of this post, we will assume that the employer also has stop loss insurance, which means that we recommend reviewing the terms and conditions as well as rates involved.
Putting a cap on rates tends to be the best option for employers, but this isn’t always the case. These considerations should be done towards the end of each policy year, before renewal. Each employer is different. A stop-loss professional should be able to help you with this.
Assessing Risks for Self-Insured Employers
Another important factor to consider is the amount of risk that you have when it comes to encountering catastrophic employee claims. It is important to determine if you are tolerant to risk, or if you are vulnerable to it. Some large employers have self-funded plans that include several large companies with multiple stop-loss plans added on to their plans. For large self-insured employers, this is another reason why it’s time to evaluate stop-loss insurance. In the past, stop-loss might not have been necessary. But it doesn’t look like large claims will go down in cost anytime soon – so large employers should explore stop-loss insurance.
For smaller employers with fewer than 500 employees, a catastrophic claim could be a huge blow to their dedicated healthcare plans – causing them to return to traditional full coverage. This is another reason to evaluate risks for all employers, and whether to add or modify existing self-funded plans with stop-loss insurance.
Stop-Loss Can Help!
As previously mentioned, healthcare costs and claims will probably continue to rise. To keep up with this changing healthcare market, stop-loss insurance underwriters will evolve right along with it. At Prodigy, we always stay up-to-date on all of the industry innovations and options that self-funded healthcare sponsors have at their disposal. If you have any questions or want to see whether a stop-loss plan is right for your business, feel free to give us a call! We look forward to hearing from you.