“When your Reference Based Pricing Plan is pooled with traditional managed care plans you are subsidizing those poorer risks with a premium load you don’t deserve. You receive very little underwriting credit. That doesn’t happen when pooled with other groups practicing the same cost effective strategies. Where Sun Life sees stop loss problems Risk Managers sees stop loss solutions” – Bill Rusteberg
Sun Life Sees Stop-loss Problems Spiking
MyHealthGuide Source: Allison Bell, Benefits Pro (full text), 2/14/2025
Excerpts
A surge in stop-loss claims caused its costs to spike in the fourth quarter of 2024 at Sun Life Financial’s U.S. operations.
The company responded by increasing renewal prices by 14% and cutting ties with some plans with very high claims, according to Dan Fishbein, the president of the Sun Life US unit.
“We have taken pricing action on more than two-thirds of the business,” Fishbein said during a public conference call with securities analysts. “We probably do need to take a little more pricing action.”
Fishbein’s comments are important because, in the past, he has suggested that stop-loss market competitors were complaining about their stop-loss unit performance because they had underpriced coverage in an effort to gain market share.
Cigna executives said an increase in claims late in the year pushed the ratio of stop-loss claims to premiums to about 90% to 95% for all of 2024, or at least 4 percentage points higher than it had expected.
Voya said its ratio of stop-loss claims to premiums soared to 115% in the fourth quarter of 2024, up from 76% in the fourth quarter of 2023. The company had expected to see the loss ratio increase to 86%.
