Reinsurance is insurance that is commonly purchased by insurance companies to cap the losses on specific pools or blocks of risk within their company. Reinsurance is also widely secured to provide valuable insurance protection in order to limit the liability and claim losses of self-funded health plans sponsored by employer groups.
There are many types of reinsurance policies offered in the employee benefit marketplace. Choosing the right policy is critical for your organization. A reinsurance carrier that is financially strong and maintains high financial ratings does not necessarily mean that the carrier offers a reinsurance policy that is right for your plan. Purchasing a reinsurance policy based upon price alone could potentially expose your organization to unknown liability.
Policy provisions that are made for larger companies may not be suitable for a smaller firm. Most reinsurance policies have provisions that are distinctly different from one company to another. Because reinsurance carriers have different definitions in their policies, it is essential to have experienced professionals that are experts in the area of reinsurance in order to properly review and communicate these differences, so you can make an informed decision.
Reinsurance Coverage Options
Specific Stop-Loss protection is insurance coverage that reimburses the health plan for paid claims on a specific individual plan member that exceeds the specified risk deductible.
Specific Advancement is a feature that provides immediate funding on eligible claims that exceed the specified risk deductible, in lieu of waiting until the end of the contract period for reimbursement.
Aggregate Stop-Loss protection is insurance that protects the plan from an extraordinary number of specific claims on plan members. Claims up to the Specific Deductible are covered under the Aggregate. Claims that exceed the Specific Deductible are covered by the Specific Stop-Loss coverage.
Aggregate Monthly Accommodation is a monthly funding advancement feature for eligible aggregate claims that exceed the year-to-date Aggregate Deductible, in lieu of waiting to receive reimbursement at the end of the contract period.