The 3 Most Important Provisions of Stop Loss Contract

 As a broker, you are often tasked with finding the best coverage to protect your self-funded client's assets - but when it comes to choosing a Stop Loss contract, what are the most important features to ensure their financial health?

• No New Laser at Renewal

What is a "Laser"? That sounds cool! 

Not in this case...In Stop Loss, a Laser is an individual assessment placed on 1 or more employees, which applies additional fiduciary responsibility to the employer for those individuals covered under a self-funded plan. For example, you may choose a $50k deductible per employee, yet one claimant has ESRD and requires a $250k Laser to cover their ongoing risk. 

What a No New Laser at Renewal (NNL) provision does is prevent the Stop Loss carrier from applying these new assessments at renewal, regardless of what type of risk comes on the plan. This one decision can save 100's of thousands dollars, and will make you look like a genius!

•  Rate Cap

This feature nearly universally comes attached to a NNL Provision. They are like lifelong friends fighting financial instability!

A "Rate Cap" places a top-end limit that the premium can increase at renewal time. Most often the Rate Cap is 50%. You may scoff, but in a year where you have $1M+ premie triplets, you’ll be thanking your lucky Stop Loss stars that a rate cap was in place.

Make the decision to purchase a NNL & Rate Cap and Mr. Broker, you are 2 for 2!

• Mirroring

Is that like annoying your friend by mimicking every move they make?

Well in terms of the plan doc...kind of!

This means that the Stop Loss carrier “mirrors” the underlying plan document, so whatever it says, goes. This will prevent potential gaps in coverage, possible eligibility disputes, and makes sure that the plan document has proper discretionary language. Stop Loss carriers have the right to review the plan document prior to mirroring and will work with the broker/employer to make sure the language provides adequate protection for all parties. Once approved, that baby is mirrored and you have purchased the Stop Loss Trifecta!

If you’d like to know more about these provisions and many others that Sun Life has to offer your self-funded clients, feel free to message me here, or shoot me an email at [email protected].

Thanks for reading!