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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.

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