The medical stop-loss market remains challenging.
Karin James, an assistant vice president in the U.S. stop-loss operations at Sun Life Financial Inc., Toronto (NYSE:TSX), gave that assessment during a recent interview.
The Patient Protection and Affordable Care Act of 2010 (PPACA) has increased interest in stop-loss and created opportunities, but “it’s a very tough market,” James says. “Very competitive.”
A stop-loss plan is a kind of insurance plan for an insurance plan. Self-insured employers use stop-loss programs to protect the plans against catastrophic losses.
The authors of PPACA have caused employers to give self-funding and stop-loss a new look by exempting self-funded plans from many of the new PPACA mandates.
Other provisions have increased interest in stop-loss by eliminating major medical plans’ — including self-funded plans’ — ability to apply lifetime benefits limits and phasing out their ability to apply annual benefits caps.
In the past, many large employers used their large size and annual benefits limits, such as $1 million caps, to manage claims risk. They did not feel they had to buy stop-loss.
Now, the restrictions on benefits limits are changing some employers’ views about stop-loss.