When it comes to medical stop loss, it’s important to get the coverage that’s right for your clients’ needs and budgets. Many major medical insurance carriers offer their own coverage, and may encourage you to “bundle” your stop loss with their plan administration. But as with any major purchase, it’s important to check out the various options the marketplace has to offer.
The fact is, third-party stop loss carriers provide value and services that may be a better fit for your clients. Here are some common myths about third-party stop loss coverage, and why it’s okay to separate it from medical and pharmacy benefits.
Myth #1: Bundling with a single carrier maximizes savings
Bundling medical and pharmacy benefits and stop loss insurance with a single carrier doesn’t always lead to cost savings for the employer. Consider these facts:
• When stop loss coverage is bundled with their medical and pharmacy benefits, clients may miss out on a key advantage of partial self-funding: plan design flexibility and control over the individual aspects of the plan. By keeping their stop loss coverage separate from their administration and network provider, they can choose the technology and cost containment solutions that best suit their unique plan and member needs.
• Unbundling creates more competition in the stop loss market, which can help drive down annual premiums.
• Third-party carriers monitor high-cost claimants to identify opportunities for savings. This not only helps maximize savings, it can improve the claims experience and ultimately lead to more favorable renewals for employers.
• Stop loss carriers with clinical resources can serve as a second set of eyes to help protect plan finances from fraudulent or duplicate claim activity. Third party carriers see claims across a broad spectrum of networks and payors, while most medical carriers only look at the first dollar level.
Myth #2: Unbundled stop loss leaves employers more vulnerable to gaps
Some employers are concerned that having separate medical and stop loss carriers could lead to "gaps" in coverage between what their medical administrator may pay and what the stop loss carrier will cover, leaving them vulnerable to high-cost claims. Here’s the reality:
• Premier carrier contracts have limited exclusions, which maximize reimbursements for employers, without internal limits that might conflict with an employer's plan document wording.
• Best-in-class carriers automatically mirror the employer's plan document—including experimental treatments and specialty drugs—and reimburse stop loss claims accordingly.
Myth #3: Unbundling stop loss coverage leads to delayed claims payments
You might assume that keeping medical and stop loss coverage bundled with the same carrier would lead to more efficient claims processing, but that’s not always the case. Many variables determine how quickly stop loss claims are processed, and turnaround times for a third-party carrier may be just as fast—or faster—than a bundled one. Here’s what you should know:
• Bundled approaches are not always settled immediately with some taking several weeks to resolve.
• Best-in-class third-party stop loss carriers offer electronic claims reimbursement to avoid check-printing and mailing delays.
Myth #4: Unbundling stop loss can be more complicated than keeping everything with one carrier
It’s reasonable to think that bundling a medical plan and stop loss coverage under the same carrier would reduce complications and increase efficiencies for brokers, consultants and employers. But separating coverage with a third-party stop loss carrier does not add to the workload, and may bring advantages you hadn’t considered. Here are some key facts:
• Many third-party carriers accept stop loss reporting from the major carriers as complete, so the employer is not responsible for submitting eligible stop loss claims.
• Unbundling stop loss allows brokers, consultants and employers to access better data on high-cost claimants than what is provided in a bundled approach.
• Major carriers have an in-house team of nurses who focus on finding ways to lower the cost of ongoing treatments or drugs.
• Brokers and employers have the flexibility to select cost containment vendors and solutions that lower the cost of reoccurring claims.
Keep these “myth-busters” in mind as you consider starting or renewing stop loss protection for your clients. If you have questions, contact your Symetra representative.