Steady and significant increases in health care costs have left many employers searching for ways to control costs for themselves and their employees. Stop loss health insurance provides one alternative to help these companies manage expenses if they have chosen to self-fund their healthcare plans.
How Does It Work?
Stop loss programs do just what their name implies; they step in to provide coverage for unexpected and catastrophic claims. Stop loss insurance providers group together companies with similar profiles and approaches to risk management. Each company agrees to pay losses to a specific amount. If that amount is exceeded, the other companies will contribute to coverage.
Stop loss programs work best for companies that take a strong, proactive stance toward health benefits. These companies put a focus on wellness, and make health-management tools available to their employees. These companies also use best practices in wellness management to reduce costs.
Among the benefits of a stop loss program are:
- cost savings
- access to benefits and premiums normally available only to larger companies
- reduced cost volatility and fluctuation
- greater control of your health benefits plan
Stop loss health insurance programs do not work for everyone. But for mid-sized companies that have chosen to self-fund their health insurance, stop loss insurance programs can be a powerful tool for reducing costs and enhancing employee benefits.