What is it?

Group Medical Stop Loss provides excess loss insurance coverage protection to employers who choose to self-fund the health benefit plans they offer to their employees. Self-funding is an alternative to traditional fully-insured group health plans and is governed by federal law (ERISA).

How does it work?

The employer establishes (and can design the benefits for) his/her own health plan, funded by the contributions of both the employer and participating employees. The self-funded plan is responsible only for its own incurred claims and other costs – and does not subsidize other employers’ plans, as is the case with fully insured plans. And because self-funded plans are regulated by federal rather than state laws, they are not required to include many of the costly benefit and administrative mandates otherwise imposed by the states upon fully-insured plans. The Advantage Performance plan protects the employer from additional liability in the event that the self-funded plan’s claims and expenses exceed a pre-determined level of expected costs in a given year.

Why do I need it?

In combination with the Advantage Performance Stop Loss coverage, self-funding offers employers the possibility of significant savings in the cost of providing medical expense coverage to their employees compared to traditional fully-insured plans: control over plan designs, lower state premium tax, enhanced cash flow, cost-effective claims processing and timely reporting by an experienced Third Party Administrator, and avoidance of costly state mandates. And most important of all: the possibility that the employer may receive a return of any unused claim funds!