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Stop Loss Coverage
Stop loss coverage is like a safety net over the pit of potentially devastating financial loss from catastrophic claims. In an era of dramatically rising and often unpredictable costs, stop loss coverage from BCS Insurance offers flexible, reliable protection for Plan reserves.
For Group Accounts
We can work with Blue Cross and Blue Shield Plans to provide either aggregate or specific stop loss coverage for all groups, or for certain groups selected by the Plan.
Aggregate coverage may be purchased at attachment points of 120% or higher, up to $2,000,000. Specific coverage starts at an attachment point of $25,000 and can go up to a maximum of $2,000,000 per person, per contract year.
BCSI acts as managing underwriter and administrator for the stop loss program. Plans are responsible for direct billing of accounts; policy issuance in cases where the Plan wishes to be the direct writer, with BCSI as reinsurer; and rate quotation and proposal issuance, with BCSI approval.
For Blocks of Business
Plans also can opt to purchase stop loss coverage from us for blocks of business. For example, a Plan can select this coverage for all of its subscribers, or for certain classes, such as small group or direct pay. This allows Plans to reinsure, at a fixed cost, each subscriber's claim expenses that exceed a certain amount. This removes those losses from the Plan's experience and protects its reserves from a potentially devastating blow. It also allows Plans to include the cost of this reinsurance in its pricing formula, which state insurance departments view as a cost of doing business.
Stop loss coverage for blocks of business can be attached to contracts as points ranging from $25,000 to $500,000 per member, per year, with a maximum benefit of $2,000,000. BCSI offers three forms of reinsurance for this coverage: incurred; incurred and paid; or paid - with the Plan ceding to BCSI the catastrophic claims costs that are over the attachment point.
A unique feature of this coverage allows Plans to cover organ and bone marrow transplants on a first-dollar basis, as opposed to only those expenses that are over the stop loss attachment point.
For HMOs
BCSI has partnered with another insurance company to offer a superior stop loss protection program for Blue Cross and Blue Shield HMOs. This coverage, which protects both hospitals and physicians, can be tailored with a variety of deductibles, limits and benefits to custom-fit each contract.
Stop loss coverage for HMOs is written on a fully incurred basis, so that expenses by contract year are easily identifiable.
All Plan HMOs that participate in our stop loss program get immediate access to the Blue Cross and Blue Shield Association's (an association of independent Blue Cross and Blue Shield Plans) Blue Quality Centers for Transplants, which can offer savings for covered transplant expenses. Also, stop loss contracts can include insolvency/continuation of coverage protection, which many states now require by law.
For more information, please contact Theresa O’Shea at 630.472.7738 or at toshea@bcsigroup.com
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