Reinsurance - Increase?

bamahr

We are a self-insured group and have a reinsurance policy with an individual stop-loss at $40K. I have my health increase - but am waiting reinsurance rates. Anyone have the rate increase on reinsurance - we have had two hit stop loss and a third that will before the end of the year - so I am expecting triple digit increase. The previous thread did not give specific increase on reinsurance - Thanks for the input.

Down_the_Middle

Recognizing that the reinsurance market is more favorable right now, it is also subject to wide swings....... If your stop loss is truly $40K (vs. $400K), then I'd be surprised if you don't get a sizable increase. Our stop loss is currently $250K and we've managed to remain status quo for the next 12 mos.

bamahr

Is that stop loss for the entire group or individual? Does your plan have an individual stop loss or just a group? Ours is truly $40K per individual - when an individual hits $40K - we are reimbursed for their expenses. The maximum annual aggregate is $1 Million - I would have to have 25 employees go over $40K in claims to hit maximum annual aggregate. This has been cost effective for us. The two that hit stop loss this year had claims over the premium we paid.

Down_the_Middle

That was helpful information. Our stop loss is $200K per individual with no aggregate. I can't tell you what to expect for reinsurance increases, but with such a small number of claims reaching $40k, I can't imagine it would be too significant. Stop loss is a risk/affordability issue so your organization has chosen a different path than mine and there's no perfect path. We've chosen to take a higher risk and in exchange have saved considerable stop loss premiums over the years. Is your reinsurer not yet ready to tell you the premium or are you trying to "estimate" what it will be down the road? Your TPA or claims administrator should be able to help you project future reinsurance premiums............... Good luck

bamahr

How many employees do you have? With only two possible three hitting stop loss - I have thought of raising it. The Owners are not comfortable with taking the kind of risk your company does. I definately want them at their own comfort level - I just provide options. We are insured by BCBS - Rep. said he can't guess the increase and the agent (seperate company from BCBS) is working hard to get it. Thanks for your input - I would like to know how many employees you have. Might help me gather data for a possible change.

LBL

We have 1100 on our insurance and went to a $150,000 stop loss last year. It truly is a function of your plan participants and willingness/aversion to risk. Our stop loss premium decreased 20% for 2004, and we had about 5 that went over the specific. We like to look at scenarios each renewal for going to the next level of stop loss -- to see how much we'd save. It's always a gamble, but you can manage it with some help from your TPA, I would think. (At least ours gives us advice.)

SMace

Our stop loss is 100,000 per individual and we do have an aggregate of roughly 4.5 million (900 ee's, 8 states). Our broker suggested we drop the aggregate coverage to lower our rates for next year. We have never come close to the aggregate. We have not received rate info back yet, but I'll try to remember to update when we do.

bamahr

Our agent has also suggested to drop the aggregate. I have a few other suggestions once I get the renewal numbers. I appreciate everyone's input. - Thanks

SMace

What other situations did you get?

bamahr

The couple I am looking at is raising the individual stop loss - I think we can take a bigger risk than $40K - with only two- possible three hitting stop loss. I have also considered dropping the aggregate - as mentioned above. on the health insurance side I want to have a deductible on RX Card - we have too many just using the RX Card without considering whether it is generic or brand. I hate to do that but our RX expenses are huge.