As high-cost medical claims continue to rise among employers that self-insure their group health benefits, the number of senior executives, financial officers and risk managers involving themselves in their company's decisions regarding stop-loss insurance is also increasing.
Sixty-nine percent of the 244 employers polled in Alexandria, Virginia-based Aegis Risk L.L.C.'s 2014 “Medical Stop-Loss Premium Survey” said their company's chief financial officer had been directly involved in stop-loss reviews and coverage decisions in 2014, compared with 63% in 2013 and 52% in 2012.
Additionally, 40% of the employers Aegis polled in 2014 said one or more of their company's senior executives played a role in stop-loss decisions, a slight increase from 39% in 2013 but more than double the 18% reflected in 2012, according to Aegis' report.
Risk managers are also becoming more involved in stop-loss reviews and coverage decisions, with 19% of employers bringing their risk management departments into stop-loss discussions in 2014, compared with 12% in the prior year's survey.
The report's authors say the heightened degree of senior-level attention on stop-loss insurance is being driven both by the rising expense of the coverage and employers' broadening exposure to catastrophic medical claims.
“Formerly a rare event, claimants in excess of $1 million are more and more common,” Ryan Siemers, Aegis Risk's founder and principal, said in a statement released Thursday alongside the report.
Twenty-three percent of employers surveyed in 2014 said they had incurred at least one medical claim in excess of $1 million within their last two policy periods, up from 14% in 2013.
As a result, the report indicated that individual stop-loss premiums have increased annually by 7% to 10% over the last few years, depending on the contract type and deductible.
“The drivers may be several, including removal of dollar limits, specialty drug therapies and more aggressive provider billings,” Mr. Siemers said. “It's important to note that claimants of this size create notable risk to not just the benefit plan, but organizationally to the employer or plan sponsor as well.”