Self-funded and stop-loss renewals: what to expect.
A self-funded renewal has two moving parts: the stop-loss rate and the administration fees, and the claims experience that sits behind both. Knowing how each is built lets you prepare for the number before it arrives.
What drives a stop-loss renewal.
Your Own Claims Experience
Stop-loss carriers look hard at how claims ran against expected, and especially at claims close to the specific deductible.
Large Claimants
Individuals with high claims, or known conditions likely to produce high claims, can lead to a laser or a higher individual deductible.
Medical and Drug Trend
Underlying cost trend feeds into rates, and specialty drugs and new high-cost therapies weigh heavily.
Contract and Market Changes
The contract basis, attachment levels and the carrier’s own appetite move the price, whatever your claims did.
Administration Fees
The administrator’s fees and network charges also renew, and are negotiable if you start early.
Plan Changes
Added benefits, changes in enrollment and shifts in who is covered affect expected claims and therefore pricing.
How the renewal unfolds.
Start early. The leverage is greatest before the carrier sets its terms.
Months Ahead: Review the Year
We review claims against expected, large claimants and open claims, and decide what to explain to the carrier.
Before Renewal: Prepare the Story
We prepare a clear account of what happened, what is being done about it and what the plan expects next.
Renewal Arrives: Read the Terms
We read the new rate and the contract terms, including lasers, attachments, basis and any new exclusions.
Negotiate and Market
We negotiate with the incumbent and take the stop-loss to market when it makes sense.
Decide on Structure
Higher attachments, a different basis or a new carrier are all choices to weigh against the price.
Close the Gaps
We confirm the final contract matches the plan document and fix any mismatches before the effective date.
How we prepare you.
Report Large Claimants Promptly
Timely notice protects reimbursement and builds credibility with the carrier at renewal.
Manage the Drivers
We look for fixable drivers such as pharmacy, site-of-care and high-cost claim management, and act on them during the year.
Keep Alternatives Warm
We keep competing stop-loss and administration options current, so renewal is a choice, not a deadline.
Three questions to settle.
What Is the Renewal Based On?
Ask the carrier to explain the rate by claims, trend and contract changes.
Which Individuals Are Lasered, and Why?
Request the list and the reasons, and ask what would remove or change them.
What Changed in the Contract?
Compare the new contract to the old one line by line, not just the rate page.
Common Questions About Renewals
When should renewal work start?
Several months before the effective date. Earlier is better for stop-loss because carriers begin underwriting well before the rate is final.
Can we shop the stop-loss without leaving the administrator?
Often yes. Stop-loss and administration can come from different companies. We check what the administrator’s contract allows.
What if we have a new high-cost claimant?
Report it quickly, document the care plan and prepare to discuss it at renewal. The claim may lead to a laser.
How is the rate compared year over year?
We compare the rate per employee per month, the attachment points and the contract terms. A rate that looks flat can come with narrower coverage.
Does a good year protect us at renewal?
It helps, but carriers also price the risk they expect, not only the year just past.
Does CFH negotiate on our behalf?
Yes. We negotiate with the stop-loss carrier and the administrator, and bring alternatives where they improve your position.
Send us your renewal.
We’ll tell you whether it looks competitive, where we see opportunity, and the five questions we’d put to your carrier. No cost, and no obligation to move anything.
The renewal letter
Your current plan summary
Contribution split by tier
Enrolled counts by tier
Four documents — two more if your group is 50 or more. Nothing else; every extra one is a reason to postpone.
Laws and rules referenced
29 U.S.C. § 1144(b)(2) — Stop-loss is regulated as insurance while the self-funded plan is not.
29 U.S.C. § 1102 — The plan document the stop-loss contract must match.
This page is general information, not legal, tax or actuarial advice. Rules change and facts matter, so confirm your situation with counsel or a qualified advisor.
An independent employee benefits consulting firm. We look at the entire benefits program: cost, plan performance, risk and administration.
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