Riders

Most insurance policies leave little room for negotiation other than coverage amounts and deductibles.  Riders are a way to separately purchase additional benefits to customize your policy.  Stop loss insurance is a way to limit financial risk so the riders associated with it are for financial benefit, not health benefit.

For example, you may be able to tailor your plan to include some/many of the following features:

To prevent the risk of tying up cash for a high dollar catastrophic claim, you may be able to select a rider that provides for the insurance company to directly pay the claim to the health care provider instead of reimbursing the plan at the end of the month.  This is called Advanced Funding.

Another available rider, known as Aggregating Specific, is one in which your company can reduce premium payments by paying a portion of the stop loss claims out of pocket.  This choice has inherent risk so it is only prudent for plans with strong financial footing.

When changing providers or reverting to full insured health insurance, the issue of incurred vs claims pay dates and contract start vs contract end dates arises.  There are options for riders that will address this issue.  One rider option , called Terminal Liability, is to extend the date until which claims will be paid on the current contract.  In this case claims at the end of a stop loss policy will be paid by the outgoing insurance policy.  Another approach is a rider on the incoming insurance policy to cover previously incurred but not yet paid claims.  This is known as a Run-in contract.

Rate increases can be capped with a rider so that companies will be able to predict expenses further than 12 months.

 

If you have questions about your stop loss insurance plan or the riders that are available in the market, please contact us.

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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.