Questions to Ask When Hiring a Stop Loss Insurance Broker

Do we need stop loss insurance when we are already self insured?

Not necessarily, but there are a few issues to consider.  Since the implementation of the ACA (Obamacare), employers now have no upper limit on the cost of a claim, due to the requirement to have unlimited liability limits. Stop loss insurance will play a key part in limiting that risk for the employer.

In addition to the ACA issue, which applies to all employers, a stop loss broker can help you determine whether you might want stop loss coverage or whether your current stop loss coverage is sufficient by answering just a few questions.

  • What has your claims experience been like?
  • What are your reserves?
  • What is the number of subscribers?
  • Do you have any ongoing catastrophic illnesses such as Hemophilia or Cystic Fibrosis?

How long have you been in business as a stop loss broker?

Ask this question, because you want to have confidence that you are placing your business with an experienced, reputable company. A stop loss broker will:

  • Make sure there are no hidden exclusions in your policy
  • Market your business to multiple carriers they already have a relationship with to ensure the best quote possible
  • Determine your direct need for insurance, ie deductible level, additional coverage options, etc.

What will your role be once the business is placed to the stop loss carrier?

An experienced stop loss broker will:

  • Track your claims and submit them to the reinsurance carrier
  • Track your reimbursements
  • Send monthly updates of your claims at 50% and 100% of the deductible
  • Dispute any denied claims

Will you be submitting our claims to the reinsurer?

Some brokers will assume your underlying plan will be submitting your claims.  You will want to know who is submitting your claims, how they will submit them and how you will obtain your reimbursements.

What work do you do behind the scenes to ensure we are getting reimbursed properly?

An experienced stop loss broker will have a database(s) that will be able to import your claims (if the underlying plan supplies this), and/or the underlying plan will supply claim reports and excess reports to your broker.

Is there a cost for the claim reporting from the insurance carrier?

Insurance companies typically charge to access the information needed to submit claims to your reinsurance carrier.

What information will you need in order to market our stop loss?

In order to obtain the best quote possible for your reinsurance, your broker should obtain:

  • Census
  • Excess claims over 50% for at least 3 years
  • Plan Summaries

Should we market the stop loss to more than one carrier?

Yes, always. You absolutely want to make sure you are getting the best quote and by sending it out to more than one carrier you are ensuring that.  Expect to solicit at least 3 carriers, but 5-7 is optimal.

 

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In 2011, the top 5 most expensive medical conditions treated in US hospitals were: Septicemia, Osteoarthritis, Complication of device, implant or graft, Liveborn, and Acute myocardial infarction

From 2010 to 2013, the number of claims that were individually $1 million or above rose by 1,000%

In 2017 approximately 18% of the American public will purchase insurance through exchanges, radically transforming the health insurance landscape.

In 2014, 98% of large firms (= 200 Workers) offer 1+ wellness programs to their employees.

The most costly 1% of patients account for 20% of national health expenditures – accruing average annual expenses of nearly $90,000 per person.

6% of firms offering fully-insured plans report they intend to self-insure because of Obamacare.

In 2014, PPO plans remained the most common plan type, enrolling 58% of covered workers.

In 2012, 93% of businesses with 5,000+ employees and 80% of companies with 1,000-4,999 employees were self-funded

Massachusetts has the third-highest prevalence of self-funded insurance in the small-group market (Fewer than 50 employees).

In 2013, the average deductible was $2,906 for individuals selecting plans from marketplaces. This compares with average deductibles of $1,135 for an individual with employer coverage.

In 2013, the average annual premiums for employer-sponsored health insurance are $5,884 for single coverage and $16,351 for family coverage, up 5% and 4% respectively from 2012.

From 2010 – 2013, cancer followed by chronic/end stage renal disease and leukemia accounted for the top 3 costliest illnesses.