ACA RE – The Best Stop Loss Policy Ever?

By Bill Rusteberg

Transferring risk has never been easier. Lasers are no longer relevant and (almost) never a factor. Rate setting becomes a simple process.

Aggregate stop loss coverage is all that’s needed. Add a corridor to expected claims with the comfort of knowing diagnosis codes will trigger risk transfer to ACA RE’s Compassionate Care Plan. Aggregate premium rates would be about as expensive as a cheap date on a Saturday night in downtown Tulsa.

β€œThe concept sounds to easy to be true, but the ACA has set up the ability for employers and employees on a voluntary mandatory basis to choose a better plan in the Individual Marketplace and save a significant amount of money for both!”

Can plan sponsors shift workers with high medical costs from the company health plan into online insurance exchanges created by the Affordable Care Act? It’s the same question as “Can I rob a bank?” The answer is yes. You can do anything you want to do. Choice is good.

β€œSuch an employer-dumping strategy can promote the interests of both employers and employees by shifting health care expenses on to the public at large,” wrote two University of Minnesota law professors in a 2010 paper that basically predicted the present interest. The authors were Amy Monahan and Daniel Schwarcz.

The ACA risk adjustment program plus government subsidies insures carriers active in the individual market remain profitable. Money comes from middle class taxpayers and government printing presses working overtime.

“It’s our money so why not take advantage of it” says Ivan York, owner of Triple A Manufacturing, a 500 life case in Waring, Texas. “We put four of our high risk members on individual policies, pay all their premium costs and out-of-pocket expenses. We are saving hundreds of thousands of dollars while at the same time providing members in their time of need the best health insurance when they need it the most! We call it the Compassionate Care Plan!

The United States government, by gifting capacity to insurers, acts as a de facto stop loss carrier. ACA RE stockholders include working class plan members whose taxes support ACA risk sharing. More self-funded plan sponsors and plan members are realizing they should take advantage of dividend distribution when needed instead of continuing passive reinvestment strategies fueled by ignorance.