Once again, the annual Aegis Risk Medical Stop Loss Premium Survey has shed light on the ways in which American employers and their employees are making stop-loss insurance coverage work for them.
The 2018 survey, sponsored jointly by Aegis Risk and the International Society of Certified Employee Benefit Specialists, included even more respondents than the 2017 survey. In total, 512 plan sponsors participated. Ranging in size from 32 employees to more than 44,000, this year’s survey respondents represent 800,000 employees.
One statistic that might unnerve plan sponsors is the rising rate of catastrophic claims in excess of $1 million. While 38% of survey respondents didn’t have any claims over $500,000 during either of the last two policy years, 30% of plan sponsors did incur claims exceeding $1 million during the last two years – and 11% reported claims greater than $2 million. Those are sharp increases compared to just one year ago. In the 2017 survey, only 21% of plan sponsors reported claims greater than $1 million in the previous two policy periods, and only 5% incurred claims exceeding $2 million.
The survey’s authors attribute these rising rates of catastrophic claimants to aggressive hospital billing, specialty pharmacy claims and “orphan drug” treatments – that is, drugs that are used to treat rare diseases, which aren’t mass produced and therefore tend to be very expensive.
Another significant change from last year’s results involves renewal policies. In total, 38% of respondents said that their policies don’t allow for excluding claimants (lasering) at renewal time, down from 44% last year. More plan sponsors are also forgoing a renewal rate interest cap: compared to 34% that had an increase cap in 2017, only 20% of this year’s respondents have policies that make this provision.
Other findings included:
This year, 99% of surveyed plans include pharmacy coverage, a tick up from 98% in 2017.
- Compared to last year, more plan sponsors say that the departments of benefits/human resources, risk management, finance/CFO and executive leadership play a role in making stop-loss decisions.
- In the 2017 survey, only 11% of survey respondents reported that at least one claimant had been lasered – but that was low compared to the 18% who responded this way in 2015. In this year’s survey, 17% reported having at least one lasered claimant.
To plan sponsors that are looking to trim their stop-loss spending without sacrificing coverage, the survey’s authors offered the same suggestions they did in the 2017 survey:
- Be aggressive in finding and taking advantage of all discounts that your plan allows.
- Work with a broker or consultant who has extensive knowledge of the complexities of stop-loss coverage.
- Opt for stop-loss policies that match your health plan and offer laser-free renewals with rate caps.
Finally, the survey revealed one reassuring bit of data: stop-loss coverage is working for the majority of respondents. In all, 72% said they have no interest in finding an alternate approach to risk management.
To find out more about stop-loss coverage and its benefits for your organization, contact us today.