Stop Loss Insurance: How it works for your Health Plan

[@Alexanderjones-ss9uk]

Informative video, thanks for sharing.

[@FriendswithyourBenefits]

Thanks for checking out our video on stop loss

[@Nmh8616]

What happens when a group terminates a stop loss policy? Can you elaborate on the process of when a claim is incurred, processed, paid through each vendor (TPA, SL vendor).

[@FriendswithyourBenefits]

This is a good question. There a generally 3 scenarios that can happen with the ISL contract in the event the carrier is termed 1. Contract is written on an incurred 12/24 basis- the terminated stop loss carrier is responsible for claims incurred 12 months during the plan year and runout claims for 12 months after the plan year ends 2. 12/12 contract- if not converted to a paid contract, this is a gap in coverage and the health plan is responsible for any runout claims in the next year. Gaps can also exist in 15/12 or 18/12 contracts as the runout period is 3-6 months 3. Paid 24/12 contract- the new carrier is responsible for run-in claims incurred 12 months prior but paid within the current plan year. In the event of a carrier termination the new carrier would be responsible, for a claim incurred in 2023 but paid in 2024. This is the most common arrangement in the stop loss market place There is also a coverage protection called TLO which can be used by groups terminating their self-Insured plan that want protection against run-out claims in the next plan year.

[@Nmh8616]

Thank you!