Traditionally a funding option preferred by large employers, self-insured health plans are becoming more and more common for small- and medium-sized companies and firms as well. According to a Kaiser Family Foundation study, 60% of American workers covered by employer-sponsored health insurance are in self-funded medical plans.
Self-insurance has the potential to make available lower premiums and improved cash flow, but of course it also opens up employers to greater financial risk. To that end, the Guardian recently unveiled its Stop Loss insurance product for self-funded employers.
Guardian’s Stop Loss insurance aims to mitigate financial danger by offering protection against cataclysmic or unpredictable claims. Ray Marra, vice president of group products at Guardian, says the Stop Loss insurance has no minimum threshold before a reimbursement is paid and can offer proper coordination with an employer’s medical carrier or third-party administrator.
“Health care costs continue to rise, and as employers look at ways to combat that, there are a number of tactics they might take,” Marra tells EBN. “One of those tactics is to go self-funded, and obviously for self-funded, they need to build some high-end claim protection for themselves, especially in light of changes with the Patient Protection and Affordable Care Act when there are no more lifetime maximums in health plans. That’s all the more reason for an employer who’s gone self-funded to need and want stop-loss coverage.”
Plan providers can set their own stop-loss deductible level – examples given range from $30,000 up, but it’s entirely up to benefits administrators. “You can read examples,” Marra says, if you’ve happily never come across one on your own, “where individuals have incurred well over $1 million in claims cost,” which could be devastating to firms without stop-loss protection.
“It doesn’t happen every day, but it does happen,” he says. “And here’s an opportunity to budget a set amount of money to protect yourself from those unpredictable, potentially catastrophic financial events.”
Guardian’s Stop Loss insurance has been approved in a majority of states, and the company expects the rest to follow suit soon. Of course, other companies offer stop loss coverage, but Marra thinks Guardian’s stands apart.
“I think what makes this product unique is really Guardian and our relationship with our broker community,” he says. “We have a wide footprint of broker we do business with, and we thought it would be good to bring this out at this time so they have an additional product in their portfolio.”
