Most fully-insured group health plans have a claim pooling point which acts as a stop loss insurance policy against high unexpected individual claims. The scheme is intended to mitigate rate increases by transferring specific risks.
Do you have any idea what that’s costing you?
We reviewed a case recently and asked the BUCA carrier that question. The group has a $90,000 pooling point. That means claims on any individual that exceed $90,000 during the plan year are not charged back to the group in the renewal calculation.
In this instance the BUCA’s charge for a $90,000 pooling point on an employee only premium of $629 is $166. That’s a 27% rating load.
This is a case of insurance driving up the cost of insurance with the intention of reducing it. Winner takes all.
