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Here’s an idea for benefits brokers.

Offer employers self-insurance programs and stop-loss coverage for prescription drug plans, dental and vision benefits.

Many employers already know about the idea of self-insuring medical plans.

But a surprising percentage are unaware of that basic concept, and even more are unaware of the idea that they can use the self-funding strategy to control ancillary benefits features and costs.

Stop-loss insurance is, essentially, an insurance policy with a large deductible.

Stop-loss coverage reimburses the employer who self-insures for losses that are unpredictable or catastrophic in nature.

Based upon paid claims, both the specific deductible and the aggregate deductible stop-loss program for the employer’s self-funded benefit plan is initially calculated and these deductibles are recalculated each year. These deductibles may either increase or decrease annually.

With the inclusion of stop-loss insurance, the employer is assured that the cost of the benefit program will not exceed a predetermined amount. Plus, the self-insured employer has the option of increasing or decreasing this “retention” level, or deductible amount, each year.

By working with a good benefits administrator and a good stop-loss carrier, an employer can hold down ancillary benefit program costs and tailor benefits and provider lists to fit employees like a pair of comfortable spectacles.

Renny Thomas II is chief operating officer and senior vice president of corporate development for Dentafits/RX Reins, Palm Springs, Calif., a nationwide prescription drugs, dental and vision underwriter of aggregate stop-loss insurance.

He can be reached at info@dentafits.com.

Kicker: The Numbers

Who Has Dental == And Who Needs It

Worker Participation In Dental Plans

Characteristics

Participation in %

All workers ………………………………………

36

Worker characteristics

White-collar occupations …………………..

42

Blue-collar occupations …………………….

39

Service occupations …………………………

17

Full time ………………………………………….

45

Part time …………………………………………

9

Union ……………………………………………..

67

Nonunion ………………………………………..

33

Average wage less than $15

24

Average wage $15 per hour

52

Establishment characteristics

Goods producing ……………………………..

49

Service producing …………………………….

33

to 99 workers ………………………………..

24

100 workers or more ………………………..

51

Geographic areas

Metropolitan areas ……………………………

37

Nonmetropolitan areas ……………………..

31

New England …………………………………..

36

Middle Atlantic …………………………………

36

East North Central ……………………………

38

West North Central …………………………..

34

South Atlantic ………………………………….

34

East South Central …………………………..

36

West South Central ………………………….

30

Mountain …………………………………………

33

Pacific …………………………………………….

44

Source: Bureau of Labor Statistics, National Compensation Survey, March 2005