Stop-loss insurance is designed to protect self-funded employers from catastrophic claims — But it’s not a complete solution. Traditional stop-loss was never designed to protect employers from recurring specialty drug costs and limits full employer protection through contract restrictions, lasering, and the potential for massive rate increases.
Stop-loss contracts are usually limited to one year before a catastrophic drug claim is “lasered” out, leaving the employer completely exposed the following year. Lasering limits the amounts paid for high-risk individuals and can increase the company’s health plan liability.
While some employers elect to pay higher fees for “No New Laser” contracts to maintain protection, stop-loss carriers are becoming less willing to write these policies — And when they are written, the standard No-Lasering provisions are not sustained, with plan sponsors forced to pay the maximum rate at the time of renewal.
Large claimant:
Deductible:
Of plans report at least one lasered claimant
Stop-loss carriers are known to issue a massive rate increase (50%+) following large claims, making coverage unaffordable for self-funded employers. Given that 44% of new specialty prescriptions target chronic conditions, employers are left financially exposed long-term, with up to 90% of claimants remaining on the plan in future years.
Large pharmacy claims aren’t always common, but several of the United States’ most expensive drugs exceed $1 million. In fact, the world’s most costly drug is $2.125 million for just a one-time treatment. All it takes is one new hire, one new chronic condition, one new claim to easily double, triple or even quadruple a self-funded plan’s annual drug spend.
RxPharmacy Assurance uniquely enables self-funded employers of all sizes to access a supplemental stop-loss insurance product at affordable rates that protects against unexpected specialty drug claims. With our stop-loss insurance supplement, self-funded employers can potentially save up to $1 million annually.