What Is Stop-Loss Insurance and How Can It Protect Your Business?

Employers who self-fund their employees’ health care plans can enjoy real savings. However, they face significant financial risk if there are unexpected high claims.

With stop-loss coverage, you pay up to a set annual amount for smaller expenses related to routine care, with your stop loss insurer reimbursing more expensive and catastrophic claims that surpass the established threshold. By covering those costly and unexpected claims that could otherwise deplete your self-insured funds, stop loss insurance helps keep your business running smoothly.

For many organizations, combining stop-loss and self-funded insurance offers an appealing alternative to the fully insured group health plan. It can allow businesses to provide employees with the health care coverage they need while keeping the employer’s overhead in check. And stop loss insurance can help reduce the risks associated with this health care benefit arrangement.

Partnering with just one carrier for both self-funded and stop loss insurance streamlines administration. Integrated health services make it easier to monitor and manage costs. And with a centralized place to access claim data, you can more easily identify patterns and forecast future spending.

Regardless of the age or health of your workforce, unforeseen events and circumstances can cause medical claims to skyrocket. An employee may need an urgent organ transplant — or many employees may be affected by a local health epidemic. For employers who opt out of traditional insurance policies, integrating self-funded and stop-loss insurance is a smart way to ensure employee health while also protecting the bottom line.

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