Traditional stop loss participation requirements will prevent many employers from pursuing an affordable self-funded solution for ACA-compliance.
Self-funded benefits are emerging as an ideal approach for employers looking to offer an affordable minimum essential value plan to eligible workers. However, the following issues may prevent your clients from being able to pursue this solution:
- Many employers who have traditionally major medical coverage as a carve-out available only to managers and home-office employees.
- Non-discrimination testing requires that the same ACA-compliant plan be offered to all levels and classes of eligible employees.
- Stop loss is a critical element of self-funded coverage.
- Low participation among hourly workers (such as those employed in the retail, service and hospitality industries) will mean that employers cannot meet the strict participation requirements of stop loss carriers.
Some stop-loss insurers have slightly higher or slightly lower participation thresholds, but on average, anything below 80 percent will typically not receive a bindable stop-loss quote. However, an unprecedented 25% participation requirement for stop loss within Ternian’s plans will allow employers to offer this coverage to all classes of eligible employees.
To learn more about this issue, download our new white paper: The self-funding dilemma.
Ternian Insurance Group