HM Insurance Group has agreed to buy an employer health plan stop-loss business with about $100 million in annual premium revenue from Mutual of Omaha.
HM, a unit of Highmark Inc., Pittsburgh, is not saying how much it will pay for the business, but it says it will ensure continuity by keeping a regional stop-loss business in Omaha, Neb.
HM now generates about $420 million in annual stop-loss premium.
Mutual of Omaha, Omaha, says it is selling its business because it wants to move away from writing traditional health insurance and focus on core products.
The companies hope to close July 1.
“The block complements our current stop-loss distribution channel, allows us to achieve greater economies of scale and supports our strategic direction as an expert in health risk solutions,” HM President Michael Sullivan says in a statement about the deal.
Stop-loss insurance protects employers’ self-funded group health plans against catastrophic claims.
Congress put stop-loss sellers in the spotlight when it passed the Affordable Care Act – the legislative package that includes the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act.
An ACA provision has banned lifetime benefits caps and restricted or prohibited use of annual caps. Several stop-loss carriers have announced in recent weeks that they expect to offer stop-loss programs without lifetime benefits maximums.