It’s fall and if you’re a benefits leader, you are probably gearing up for open enrollment and finalizing any new vendor implementations. Now is also the time when most self-insured plan sponsors need to obtain or renew a stop-loss insurance policy, a policy placed on a self-insured medical plan that reimburses the plan sponsor for claims exceeding specified levels.

While straightforward on the surface, getting the details right in your stop-loss coverage can save or cost you millions. There are two primary forms of stop-loss policies:

• Specific Stop Loss reimburses the plan sponsor for individual claims that exceed a specific level called the Attachment Point or Deductible during the policy period. For example, a policy with a $250,000 Attachment Point would essentially cap an employer’s cost for each member at $250,000 in a year.

• Aggregate Stop Loss reimburses the plan sponsor if total claims in the plan exceed a specified level in a year. This level is usually expressed as a percentage of expected plan costs (e.g. 125 percent). As an example, a plan that is expected to have claims totaling $10M in a year with 125 percent aggregate stop-loss would be reimbursed for claims above $12.5M in the year. These policies typically have a maximum reimbursement level ($1M is common).

Here is a quick check-list to review when looking at your stop-loss renewal.

1. Have you started the process yet? If the stop-loss renewal is left to year-end, you’ll have fewer options and a greater chance of ending up with a gap in coverage. Some good initial steps are to review your loss experience, review the renewal, and check your policy against the issues listed below.

2. Do you have any eligibility gaps in your policy? These are more common than you would think. We often see an underlying medical policy that provides coverage for individuals excluded from the stop-loss policy. Common misses are COBRA enrollees, retirees, domestic partners, and inactive employees on leave or disability.

3. Do you have any benefit gaps? These would include anything covered by your medical policy, but not included in stop-loss. The most significant area to check is pharmacy benefits. Other areas to check include: behavioral health, surgical centers of excellence paid through a TPA, and claims approved outside of the plan terms (e.g. experimental procedures).

4. Does your stop-loss policy have an annual maximum? Before the Accountable Care Act (ACA), lifetime maximums on employee benefit plans were common (often set at $1M or $2M), so stop-loss policies could have an identical maximum without risk to the plan sponsor. Since ACA prohibits lifetime maximums on benefit payments, employers are taking on significant risk if their stop-loss policy has a maximum. I’ve seen claims exceed $5M for an individual in a single year.

   Employer Size	Average Stop-Loss Deductible
   200-999 Employees	$150,000
   1,000 – 4,999 Employees	$290,000
   5,000 + Employees	$480,000