Employer Stop Loss – Advantage Performance

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 as governed by federal law (ERISA).

How does it work?

The employer establishes and can design their own group health plan, funded by contributions from both the employer and participating employees. This self-funded plan is solely responsible for incurred claims and other costs, without subsidizing other employer’s plans, as is the case with fully insured plans. Since self-funded plans are regulated by federal rather than state laws, they are not obligated to include many of the costly benefits and administrative mandates imposed by states on fully insured plans.

The Advantage Performance plan helps safeguard the employer from additional liability if the self-funded plan’s claims and expenses exceed a predetermined level of expected costs in a given year.

Why do groups 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!