SOURCE: Aegis Risk
Stop loss insurance is getting more expensive. Average rate increases for 2026 are expected to be in excess of +20%. Higher prescription drugs costs is one of the main cost drivers. However, there are alternatives for plan sponsors to consider.
Employer built stop loss eliminates expensive stop loss insurance and places an aggregate claim and expense cap for each policy year at a margin above expected costs.
The following plan document language would apply:
Subject to the terms, conditions, and exclusions of this Policy, the Plan’s total liability for all Claims paid during the Policy Period shall not exceed the amount stated in the Declarations as the Aggregate Limit of Liability.
The Aggregate Limit is the maximum amount payable under this Policy for all Claim and Expenses combined, arising from all Claims paid during the Policy Period, regardless of the number of Claims made.
Annual Aggregate Limit
The Plan provides for an annual aggregate dollar limit on the total amount of eligible claims paid during a Plan Year. This limit applies to the total of all eligible Covered Benefits paid under the Plan.
The Annual Aggregate Dollar Limit represents the maximum liability of the Plan Sponsor under this Plan for the ______ Plan Year. This amount is determined by multiplying:
- the monthly aggregate factor of $___________
- by the number of covered employee lives:_______
- for each month in the Plan Year.
Nothing wrong with this. Common to P&C program policies. And the plan remains ACA compliant since plan beneficiaries have unlimited lifetime coverage as long as the money doesn’t run out. Statistically there’s less than a 2% chance of that happening if properly structured. In rare instances that does happen ICHRA has your back!
Under Employer Built Stop Loss There’s No Such Thing As A Million Dollar Claim.
