New innovations in health care are creating new opportunities for treatment, but also new risks that call for specific insurance protection. Prescription drugs for certain medical conditions such as rheumatoid arthritis, cancer, and multiple sclerosis, are now being prescribed at a cost of $30,000 per year and more. If these medications are for ongoing treatment, they could be required by the individual for a period of several years.
Because health care renewal rates are based on claims experience, any significant claims costs, particularly large recurring claims, can result directly in premium increases. Even a single claimant with catastrophic health care claims can have a considerable financial impact on the future cost of an employee benefits program.
Stop loss insurance is designed to protect against sudden, unexpected catastrophic risk. Claims in excess of the stop loss deductible per person per year are insured and do not count against the employer’s experience when setting health care budgets for future renewals. This limits the employer’s risk, while enabling continued coverage and protection for employees through the benefits plan.
Potentially catastrophic health care claims occur most often in categories like prescription drugs, hospital claims, and private duty nursing claims. Out of country emergency medical claims fall into a separate category which is fully insured with no deductible.
Benefits providers differ in the deductible for their stop loss coverage, and differ in how they treat recurring claims under stop loss. Common deductible levels are $10,000 or $15,000 per person per year, and deductibles can increase in future years for on-going claims. Ask your insurer for details on the stop loss insurance deductible in effect for your plan to be confident that your plan has the right level of insurance protection.
The Benefits Trust offers a stop loss deductible as low as $5,000 per person in each benefit year, with continuing coverage for recurring claims at the same deductible level. To find out more about how stop loss insurance can be combined with a custom employee benefits plan to control costs, talk to your benefits advisor or contact The Benefits Trust.
