Stop-Loss Insurance: Are You Overpaying for Protection?

The Stop-Loss Market Has Changed

Stop-loss insurance — the safety net that protects self-funded employers from catastrophic claims — has seen dramatic price increases since 2022. Carriers have tightened terms, raised lasers, and increased specific deductibles. But not all employers are impacted equally.

Why Most Employers Overpay

Many employers rely on their broker to market stop-loss annually. But some brokers have preferred carrier relationships that limit the number of competitive bids. Others havent optimized the plan structure — specific deductible, aggregating specific, or aggregate attachment point — to match the employers actual risk profile.

What to Evaluate

• Specific deductible level: A $50,000 vs $150,000 specific deductible can mean a 40-60% premium difference
• Laser management: Are known high-cost claimants being lasered appropriately, or is the carrier using lasers to inflate premiums?
• Terminal liability: Run-out provisions can leave employers exposed to hundreds of thousands in claims after plan termination
• Contract terms: 12/12 vs 12/15 vs 15/12 contract basis significantly impacts when claims are covered

The Independent Advantage

An independent stop-loss analysis — separate from your brokers marketing — benchmarks your current terms against the broader market and identifies whether your structure matches your risk. Employers who independently review stop-loss typically save 12-25% on premium while maintaining equivalent protection.