Cigna Corp. will be marketing stop-loss programs from Sun Life Financial Inc. to third party administrators (TPAs).
Self-insured employers use stop-loss programs to protect the plans against catastrophic losses.
Cigna Payer Solutions, a unit of Cigna, Bloomfield, Conn. (NYSE:CI), that rents the Cigna provider network TPAs, has agreed to offer the TPAs Sun Life stop-loss protection, according to Sun Life, Toronto (TSX:SLF).
Sun Life’s Wellesley, Mass.-based benefits division has already been marketing Cigna’s organ and bone marrow transplant network to its own stop-loss customers.
Cigna will still sell its own stop-loss protection to employers that do not work with Cigna Payer Solutions TPAs.
High claims costs and fierce competition have roiled the stop-loss market in recent years, but interest in the market has increased because of the Patient Protection and Affordable Care Act of 2010 (PPACA).
PPACA exempts self-funded plans from many of its requirements but curbs use of annual benefits limits. Stop-loss market watchers say the law could increase the number of self-funded plans that need stop-loss coverage while also increasing those plans’ need for protection against catastrophic losses.
Mercer, a unit of Marsh & McLennan Companies Inc., New York (NYSE:MMC), today reported signs of increasing interest in self-funding in a summary of results from a recent survey of 2,844 public and private U.S. employers with 10 or more employees.
About 28% of the employers with 500 or more employees still have a fully insured preferred provider organization (PPO) plan. About one-third of those large employers with insured PPO plans said they are likely to switch to self-funding within the next 3 years.
BOOK YOUR CARE ONLINE