It’s no secret that the costs of employer-sponsored healthcare are skyrocketing. In fact, the prices have been steadily increasing by nearly 5% every year. As a result employers are turning to innovative solutions to help bolster against these increasing costs. One of the most popular ways is through a self-funded healthcare plan. Self-funded healthcare plans are a great way for employers and their staff to save money on healthcare costs. Though they are ideal for some businesses, there are some risks. These risks can be mitigated by carrying stop loss insurance.
What Is Self-Funded Healthcare?
Self-funded healthcare is a strategy that helps employers pay for the rising costs of healthcare. Basically, rather than paying a monthly premium with high deductibles and coverage limits, your business will start a fund. This fund will be used to pay for out of pocket costs for healthcare which are often discounted. When you get to the end of the year, whatever is left in the fund you can keep to reinvest in your business. When you have self-funded healthcare, you work with a third party administrator (TPA) to manage all the administrative paperwork and you will buy stop loss insurance to help cover any unexpected large expenses.
What Is Stop Loss Insurance?
Stop loss insurance, also called “excess insurance” by some providers, is a type of insurance product designed for self-funded healthcare plans. It is a policy for catastrophic claims like surgeries and expensive medical treatments. Stop loss insurance works like any other catastrophic insurance plan where you will file a claim when you need reimbursement for a big expense. There are a couple of different stop loss insurance options including specific stop loss and aggregate stop loss. Both have a multitude of variations. Work with your TPA and insurance provider to find the best plan for your unique needs.
Why Your Business Needs Stop Loss Insurance
One of the biggest concerns about self-funded healthcare is what happens if there is a huge expense like your employee needs chemotherapy or a heart transplant. For the most part, regular doctor’s visits, prescriptions, and basic treatments are affordable enough to be covered by the fund, especially if your staff is healthy. However, catastrophic costs are astronomical and can easily delete the entire fund. If you have stop loss insurance, you won’t have to worry about how to cover large health expenditures.
If you are looking for a way to help reduce the employer-sponsored healthcare costs of your business, self-funding with a stop loss insurance package may be a great option. National Insurance Partners Inc. can help. We are an experienced TPA that has helped businesses all over the state develop a self-funded healthcare plan. To learn more about self-funding or to contact us, visit our website National Insurance Partners Inc.or give us a call at 1-866-684-2854. We’ll be happy to answer any questions and find you a great solution for your business’ healthcare needs.