Series
Stop Loss: The Enabling Mechanism
Level funded is only as protective as its stop loss arrangement, and no more. The risk layer covers eight dimensions of the stop loss market: how the mechanism works, how carriers price what they cannot fully know, where attachment points and lasers shift risk back to employers, the reinsurance capital structure most brokers never see, and the actuarial floor below which the math stops supporting the architecture.
LFP-02.01
Stop Loss Insurance: The Mechanism That Makes Small Group Self-Funding Viable
Stop loss is not health insurance. It does not cover employees; it indemnifies the employer when plan claims exceed defined thresholds. The carrier's contract runs to the employer, …
LFP-02.02
Specific vs. Aggregate: Two Protections Solving Two Different Problems
Specific stop loss protects against the one member who generates catastrophic costs. Aggregate stop loss protects against a year when no single claim is catastrophic but total …
LFP-02.03
How Stop Loss Carriers Underwrite Small Groups: What They See and What They Price
Stop loss underwriters see the group's census, geographic market, industry, and whatever prescription drug history pharmacy databases reveal before they set a price. At renewal, …
LFP-02.04
Attachment Points and Lasers: The Math and the Consequences
The attachment point selection trades premium against per-member retention in a cost curve that is not linear. The laser, a member-specific attachment point applied at or above a …
LFP-02.05
Reinsurance Behind the Stop Loss: The Capital Structure Most TPAs Never See
Stop loss carriers transfer a portion of their underwritten risk to reinsurers that the employer never encounters. When Lloyd's syndicates, Bermuda reinsurers, and domestic …
LFP-02.06
The Stop Loss Market: Carrier Concentration, Loss Ratios, and Capacity Cycles
The U.S. stop loss market generated $35.5 billion in premium in 2023. When carrier loss ratios deteriorate, as they did from 2017 to 2022, the market responds with premium …
LFP-02.07
Captive Arrangements: An Alternative Risk Structure for Employers Who Want More Control
A group captive replaces the commercial stop loss carrier with an entity the member employers collectively own. When claims run below contributions, the underwriting profit stays …
LFP-02.08
The Actuarial Problem Below 10 Lives: Why the Math Breaks at Small Group Sizes
At group sizes below 10 to 15 lives, health care's inherent claims skewness produces variance wide enough that stop loss pricing absorbs the savings level funded was supposed to …