Employers: Time to Check Your Stop Loss Policy  

DB Destinations: Trends and Legislation
Jun 27 2019

We continue to see more employers purchasing stop-loss insurance -- and for good reason. The number of claims $1.5 million and above rose 54% between 2015 and 2018. And claims $3 million and above doubled just last year alone, according to a recent Sun Life analysis.  

Cancer continues to top the list as the highest-cost condition, accounting for 27% of total stop-loss reimbursements. Injectable drugs also have a significant impact, accounting for 9% of total paid claims. The largest claim for a single injectable drug was $1.8m. With the FDA approval of Zolgensma, a $2M+ treatment for a rare childhood disorder and just the latest example of a high-priced specialty drug, employers can only expect to see multi-million-dollar claims with greater frequency.

In this new landscape, it’s hard for even the largest employers to forgo stop-loss insurance. Mercer’s National Survey of Employer-Sponsored Health Plans found that among jumbo employers – those with 20,000 or more employees – the use of stop-loss jumped from 31% to 38% from 2016 to 2018.  Sun Life’s highest claim topped out at $7.5 million in 2018, but we’ve seen claims over $20 million. Make sure you’re not taking unnecessary risks with your health dollars.  If you have stop-loss in place, how good is it?  Despite the increased risk, we’ve been able to negotiate contracts that include a rate cap and no new laser provisions, good for at least two renewals periods.  Check your stop-loss policy and see if you need to negotiate better terms. 

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