If your organization utilizes a self-funding arrangement to finance your employee health plan, you gain more flexibility and control over your healthcare benefits — but that also means taking on more financial risk. That’s where stop loss insurance comes in. Acting as a form of reinsurance, stop loss coverage helps protect your business from the financial strain of large, unexpected claims.
It works by allowing you to set a deductible with a third-party insurer. Once your claims exceed that threshold, the insurance company covers the remaining costs, capping your organization’s out-of-pocket liability.
With so many stop loss carriers in the market — and new players continuing to emerge — choosing the right one is a critical decision that may have significant financial implications for your business.
Key factors when evaluating
stop loss carriers
Financial stability and claims history
Selecting a carrier with strong financial backing may provide greater possibility that they can handle large claims, even in catastrophic situations. Reviewing their claims payment history can give you confidence that they will be able to meet their obligations when you need them most.
Comprehensive service offerings
The best carriers go beyond basic coverage, offering predictive analytics, specialty drug management, and alternative care programs. These services can help you manage and reduce high-cost claims more effectively, potentially improving both financial and employee health outcomes.
Marketing practices and pricing strategies
Exploring whether or not your benefit advisor is engaging in marketing practices that uncover the best pricing alternatives (without including features or premium increases that could be avoided) is critical. Examples include early renewal, participating arrangements, and transplant policies.
Long-term partnership potential
Stop loss insurance isn’t just about securing a policy for today — it’s about finding a carrier that can support your business as healthcare costs and risk evolve. Partnering with a carrier that offers pricing stability and customized solutions can help you adapt over time, and may help reduce volatility in your benefits strategy.
Carrier longevity and market experience
Experience matters when it comes to navigating the complexities of the stop loss insurance landscape. Carriers with a proven track record are better equipped to handle shifting market trends, regulatory changes, and rising healthcare costs. A well-established carrier is more likely to provide reliable support and strategic guidance as your company’s needs grow.
Making an informed
stop loss carrier decision
Selecting the right stop loss carrier requires a careful evaluation of financial strength, service offerings, and long-term stability. A well-informed decision may help provide consistent coverage, cost control, and adaptability as healthcare risks evolve.
Connect with our Employee Benefits team
With more than 10,000 customers managed across our National Employee Benefits Practice, eBen | Risk Strategies (now part of the Brown & Brown team) delivers the comprehensive solutions employers want and employees value.
For the latest insights in employee benefits, connect with one of our specialists.
This article is an excerpt from our white paper, Stop Loss Insurance for High-Dollar Claims: Safeguarding Your Organization’s Financial Health. Access the full white paper here.
