Any number of unforeseeable employee health crises can have a major effect on company healthcare costs: an office-wide flu outbreak, seasonal illnesses, even bad guacamole in the break room can all lead to high healthcare claims costs.
Self-funding is a proven way for employers to regain control of health care spending, but does this financial independence come with added risk? Many mid-sized companies are looking to escape the broken, full coverage system, and ultimately increase employee care options, but might be reluctant due to the threat of especially high healthcare claims. In the event of an expensive employee procedure, or a particularly high volume of claims, self-funded companies could become financially overwhelmed.
Luckily, there are safeguards in place to help companies expect the unexpected, and avoid large claims costs under the self-funded model. Employers can still take charge of healthcare spending, all while protecting themselves from outrageous claims, thanks to stop-loss insurance.
STOP-LOSS INSURANCE 101
Think of stop-loss insurance as a safety net that protects employers from outrageous claims when using a self-funding plan. Self-funding that employs stop-loss insurance is a win/win scenario — the healthcare independence offered by self-funding is simply augmented with an added layer of risk management.
Stop-loss coverage helps self-insured employers manage unexpected employee health costs, such as severe accidents, organ transplants, or terminal illness. Stop-loss insures the employer, not individuals, so employees are not held back by policy restrictions.
Stop-loss insurance comes in two forms: specific and aggregate. Each option has its perks, and, depending on the need of a given employee population, either or both stop-loss options can supplement a self-funded plan:
Specific Stop-Loss — Coverage in case of a catastrophe. This policy prevents any individual claim from exceeding an acceptable amount outlined in the healthcare plan, and limits financial exposure on any one individual.
Aggregate Stop-Loss — Protects against a higher than average frequency of claims. Caps financial liability for the whole group in the event that total claims exceed an agreed-upon amount.
Under either model, stop-loss will take over and cover costs that exceed a predetermined amount. With this safeguard, employers reap the benefits of self-funding without taking on extra financial exposure.
HOW STOP-LOSS INSURANCE PROTECTS BUSINESSES
Each stop-loss option has its perks, but pairing both specific and aggregate coverage offers a comprehensive solution to risk management. Stop-loss insurance is an important proactive step toward avoiding large claims, and one of the many ways self-funding offers more control over healthcare spending.
Apta Health is the first fully integrated self-funded healthcare solution for mid-market employers. Apta Health’s industry-leading benefit package includes stop-loss insurance, as well as other cost-savings measures such as care coordination and predictive analytics, in order to provide employers the most comprehensive and affordable healthcare coverage on the market.
Contact Apta Health to learn more about the innovative approach to healthcare that is changing employer benefits packages forever, and how employer-tailored stop-loss coverage can help minimize financial exposure.