A.M. Best Special Report: Employer Migration to Self-Insured Health Plans Bodes Well for Stop-Loss Market
OLDWICK, N.J.--(BUSINESS WIRE)--A.M. Best expects the renewed interest in the stop-loss market to continue as the product grows more attractive to employers with an appetite for risk on employee health care costs, according to a new A.M. Best special report.
“Employer Migration to Self-Insured Health Plans Bodes Well for Stop-Loss Market”
The report, titled “Employer Migration to Self-Insured Health Plans Bodes Well for Stop-Loss Market,” states that stop-loss plans are not subject to the health insurance industry fee component of the Patient Protection and Affordable Care Act (ACA) or its minimum loss ratio requirements. Thus, the product is gaining renewed interest by both carriers and employers alike.
The pricing environment remains competitive with many carriers vying for business from employers and third-party administrators. Given these new dynamics, A.M. Best expects a continued migration from fully insured plans to self-funded ones with a stop-loss component.
Although premiums and earnings have varied, the performance of the top stop-loss providers has remained relatively consistent. However, companies with their own administrative platform have gained traction due to a lower expense structure. While it is unlikely that the top stop-loss providers will lose their market leading positions anytime soon, there will continue to be movement among small and medium employer group providers.
To access a copy of this special report, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=226355.
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