Yusuf Jimenez· Senior Compensation Analyst, Beacon Retail Group
Asked in Benefits & Wellbeing ·
US non-profit in education services, 640 employees, about 1,150 covered lives, fully insured. Our renewal this year was 12.5% and the three before it averaged 9%. The broker is now suggesting a level-funded or self-funded arrangement with specific stop-loss at 150,000 dollars.
Our board is cautious by nature and a bad claims year would hurt. Reserves are healthy but they are not there to fund medical claims.
For those who made the move at a similar size: what convinced you, how volatile has it actually been, and what would you have wanted to know beforehand?
2 insightful · 2 agree · 3 replies · 60 views · 4 following
Accepted answer· by Amara Larsen
Volatility is real at your size. In four years we have had results of 91%, 88%, 117% and 94% of expected claims. On average we are ahead of fully insured. But the 117% year required a difficult board meeting, and aggregate stop-loss at 120% was what capped it. What I would have wanted to know: budget to the maximum liability, not the expected figure, for the first two years, and bank the difference as a claims reserve. And ask about lasering at renewal, where the stop-loss carrier sets a higher deductible for a named individual. A no-new-lasers clause with a rate cap is worth paying for.
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Total Rewards Manager, Aurora Hospitality
We moved at 720 employees four years ago. The deciding factor was getting our own claims data, which the insurer had refused to share in any useful detail. In the first year we found that 31% of spend was going through one hospital system at rates far above its neighbours, and that alone drove our network decision the following year.
Compensation Consultant, Tidewater Utilities
We looked at 500 employees and stayed fully insured, and I do not regret it. One member with a transplant and one premature birth in the same year would have used our entire reserve. Being self-funded is not automatically the grown-up choice. It depends on how much variance your organisation can absorb without cutting something else.
