Self-Funding and Stop-Loss Coverage: Using Data to Improve ROI & Cash Flow
After analyzing the data, it becomes pretty evident, self-funded health insurance plans are on the rise. According to the Kaiser Family Foundation, 63% of insured workers are covered with a self-funded health insurance plan. A large portion of these individuals are working for exceptionally large organizations (think: Fortune 100), but there are several benefits for medium-sized organizations to opt-into self-insured plans in lieu of fully-insured plans, as well.
When implemented strategically, with the appropriate amount of stop-loss coverage, self-funding can be an extremely effective healthcare cost management solution. Unfortunately, some are scared off by the potential volatility. Instead of focusing on the upside and working to mitigate the risks, they opt out of playing. That’s why we created a white paper on self-funding, stop-loss coverage, and how you can leverage data to save money on your health plan. In this guide, we go over:
- A quick overview of stop-loss coverage, and why it’s important.
- How to choose the right stop-loss policy.
- Tips on how data can help you “level the playing field” with your stop-loss efforts.
About Self-Funding and Stop-Loss Coverage
Stop-loss coverage is a popular lever for protecting employers. It limits financial exposure from large health claims and can reimburse employers for claims that exceed agreed upon thresholds.
As self-funded health plans continue to grow among employers with as few as 100 employees, the importance of selecting an appropriate stop-loss strategy becomes even more critical to avoid paying catastrophic claims out of working capital.
Historically, the cost of premiums and the complexity of evaluating and administering stop-loss policies made this coverage practical for only the largest employers. However, today’s stop-loss market exceeds $10 billion and offers a variety of coverage choices to brokers and employers of all sizes.
Our Self-Funded Health Plans report found that in 2015 the average stop-loss claims threshold was around $210,000 for companies with fewer than 200 employees versus $340,000 for companies with 5,000+ employees.
With claims reporting, forecasting and stop-loss analytics in a single place, Springbuk lets you model the overall cost and cash flow impact of your coverage. Now, employers of all sizes can intelligently evaluate their risk management strategies, reduce their overall plan costs, and ensure that they receive the stop-loss protection they’ve paid for.
Why You Need a Guide to Stop-Loss Coverage
Whether you’re embarking on your first journey down the stop-loss rabbit hole or you’re a seasoned veteran who has implemented self-insurance and stop-loss coverage several times before, it’s important that you have the right assistance put in place to protect yourself. Every population is unique, meaning every self-insured employer has unique needs. The more cookie cutter your approach is, the less effective it may be.
Instead, the most effective self-insurance plans are the ones that take cues from those around them. They tend to work with health analytics tools that are specially designed for working with self-insured populations, like Springbuk. This allows them to have a keen eye on the data markers tracking their population. Better data means better decisions, which can save your company substantial amounts on your healthcare spend.
For more details on stop-loss coverage and its impact on self-funding, download our white paper here: Self-Funding and Stop-Loss: Using Data to Improve ROI & Cash Flow.
If you’re interested in learning more about how a health analytics tool like Springbuk can transform your approach to self-insurance, request a demo.