Stop loss coverage serves as a fundamental layer of risk protection in self-funded plans, so I can’t stress enough how important it is to work with an experienced TPA to weigh your options.
In today’s market, there are a lot of carriers out there vying for this business. Unfortunately, it’s not as simple as choosing a policy based on the lowest price quoted. You need to do your homework and consider which one will give you the most risk coverage and the best value.
The first thing to determine is how much coverage you need. There are two types of stop loss insurance – specific and aggregate. (The Self-Funding Success website provides a nice overview of how both work.) Determining the dollar amount (specific deductible or attachment point) that serves as your threshold for reimbursement with either policy option takes some thorough number crunching. It requires a look at your whole health plan picture, including things like how many people are covered, what your claims history data reveals and where the company stands as far as financial status.
Another point I stress is understanding the terms and conditions in each stop loss contract. What is included in coverage and what’s not? What is the length of policy coverage? Will there be any gaps in coverage before or after the effective date? There can be some complex terminology with stop loss policies, so if you have ANY questions about how things work, get the answers before making a decision!
Look into carrier performance, too. Has your TPA worked with this stop loss firm before and had a good experience? Ask about things like the carrier’s accuracy in processing health claims and timeliness in paying them. You want to partner with a firm that’s going to do quality work and have your plan’s best interests in mind.
If you want to be sure you choose the right stop loss insurance for your business, team up with your TPA. Of course the policies with the least expensive rates look great on paper, but there are so many other factors that must be considered when selecting the appropriate risk protection for your company.