Stop-Loss: It’ll Make or Break Your Plan

Stop-loss coverage plays a vital role in determining self-funding success. The right (or wrong) stop-loss partner and solution can make or break a plan. So, what’s the deal with stop-loss?

To start with, it serves as protection for self-insured employers from potentially devastating claims. While self-insurance gives employers greater control over their health plans and the potential for cost savings, it also exposes them to the risk of large or unpredictable claims. Stop-loss insurance helps mitigate that risk.

If a member’s claim exceeds pre-determined levels, stop-loss kicks in and provides a reimbursement mechanism, keeping that claim from having catastrophic effects on the business. By providing coverage for excessive claims, stop-loss insurance caps the employer's liability, ensuring that a single large claim or an unexpected spike in claims won’t overwhelm their budget.

Stop-loss insurance also helps provide:

• Risk Management: Stop-loss insurance is a critical tool in limiting an employer’s exposure to high-cost claims and effectively capping the financial risk. This ensures that unexpected medical expenses, such as those resulting from a serious illness or injury, won't overwhelm the employer's budget or disrupt their financial stability. It also encourages proactive risk management, such as wellness programs and disease management to create a safety net.
• Future Forecasting: Many stop-loss carriers provide data and analytics on claims trends, which can offer valuable insights into future health care costs. Employers can use this information to adjust their risk management strategies, such as by implementing preventive care programs or targeting high-cost conditions. This allows employers to forecast their health care costs more accurately, helping them to plan and budget with greater confidence.
• Customization: Stop-loss insurance provides the option to customize plan management and plan design, letting employers select the most appropriate benefits, administrative services, wellness programs, and more. This level of control over the plan design gives employers the ability to create a health benefits package that meets their employees’ needs, while still protecting the organization from financial instability due to high-cost claims.

The second key to stop-loss success? Building a relationship with a strong partner. Having a partnership you can rely on pays off both short and long-term, introducing consistency and stability that can help mitigate both the risk and the employer’s worries. Instead of relying on the hope that a new, lower-cost carrier will advocate for you, a stable partner with whom you have an established relationship is far more likely to support you when it matters most. ?

At RMTS, we understand that real business is built on strong relationships. We work directly with clients to craft solutions that fit them best, keeping their best interests in mind. By creating those ideal stop-loss and captive arrangements, we help pave the way for a benefit plan’s success and sustainable future.?

Stop-loss has a direct link to a TPA’s ability to bring in new customers from the fully insured market. So ask yourself, why are organizations not making stop-loss a priority? Even more, why are they not prioritizing finding a premier partner in stop-loss solutions?