It’s no surprise that American health care has entered a new era. The price for medical care continues to rise, and the Affordable Care Act (ACA) has altered the way coverage is provided and paid.

To help keep benefit expenditures in check, more employers are self-funding their employee medical coverage and using stop loss to protect them and their benefit plans against large or catastrophic claims.


Without stop loss protection, benefit claim costs can quickly spiral out of control.

That’s why it’s important to look at the entire scope of a claim and try to reduce any excessive charges before they hit the books.

Understanding high claim costs

Mitigating high claims starts by understanding the conditions that lead to higher expenses. In most cases, one of the following is at work:

  • Traditional high-cost conditions, such as cancer, kidney failure or transplants.
  • Pharmacological advances, such as gene therapies and Car T-cell therapies.
  • The ACA’s removal of lifetime insurance maximums, meaning these high-cost claims are required to be paid by the plan on an unlimited basis.

Together, these factors mean that the frequency and cost of catastrophic claims are increasing. In examining Symetra’s own stop loss claims data between 2016 and 2020:

  • The number (or frequency) of claims exceeding $1 million has more than doubled since 2016.
  • The largest claim paid during one policy period to date was $7.4 million.

Working together for better results

Self-funded employers, claims administrators and stop loss carriers all play a role in managing health care costs. Here are some items to consider:

1. Monitor non-network providers. Plan administrators should carefully review all billed charges from non-network providers to ensure they’re accurate and fairly priced.

2. Compare “reasonable and customary” provisions. Make sure the plan document has a contractual “reasonable and customary” charge provision that supersedes any network agreements and gives the claims administrator a legal foundation to review and challenge network charges.

3. Review excessive charges. Whether from in- or out-of-network providers, product and service mark-ups can be exceptionally high. Many stop loss carriers employ registered nurses (RNs) to help evaluate questionable or excessive charges because they have experience with both billing and administering medication.

4. Get expert assistance. Make sure your claims administrator partners with cost-containment vendors that offer optimal solutions. Stop loss carriers can offer a second layer of access to quality vendors, including “Centers of Excellence,” which are considered the best of the best for complex, high-cost procedures and conditions.

A stop loss carrier can also act as a second reviewer to help confirm benefits are paid according to the plan language, identify duplicate charges, review bills for appropriate and “reasonable and customary” charges and more.

For more information about managing large claims, read our Inside Track educational paper.