EP478: Stop-Loss Coverage, Part 1: How It Goes Right, and How It Can Go Horribly Wrong, With Andreas Mang and Jon Camire

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Episode 478.

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"Stop Loss Coverage. Part One, How It Goes Right, And How It Can Go Horribly Wrong".

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This show is chockfull of advice.

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Today I speak with Andreas Mang and Jon Camire.

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American Healthcare Entrepreneurs and Executives You Want To Know, Talking.

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Relentlessly Seeking Value.

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Hey, question for you.

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Can it ever actually be better for a claim to get lasered?

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If your knee jerk reaction is, Nope.

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No, not so much.

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Lasered claims are always bad.

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And or if you have no idea what I'm talking about, do continue to listen.

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This question gets answered.

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Also, if you are interested in high cost claimants from almost any angle,

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this show is in fact part of the high cost claimant run of shows.

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What you'll learn today is some insights relative to how plan sponsors

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go about making sure they can pay you.

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Like if you work for, for example, some clinical organization.

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This run of shows, by the way, about high cost claimants, includes episode

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471 with Christine Hale, which spills over into the Eric Bricker episode

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472, about high cost claimants, mostly from the hospital point of view.

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And yeah, in the same breath as any plan sponsor is gonna say, high

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cost claimant, they are also likely gonna say, stop-loss coverage.

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So you can see how this kind of fits into this trifecta here.

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So, right, this show is about stop loss coverage, and as such,

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maybe you're thinking this topic sounds a little desperately boring.

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Like after 470 some shows, I'm scraping the bottom of the barrel.

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I mean, don't get me wrong, lasers or laser claims has a cool ring to

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it and all, but stop-loss coverage, well, it kind of needs a rebranding.

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Stop-loss comes off as, I don't know, not a ringer as far as compelling

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podcast titles go, but do not be fooled by, its nothing to see here name.

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Stop-Loss is, and I'm quoting Andreas Mang, one of my guests today

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who would know, Andreas says that for any given self-insured plan

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sponsor, stop-loss is one of the most important buying decisions.

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I take that to mean plan success or failure might hinge on how well

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the stop-loss decision gets made.

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But danger Will Robinson, because as Andreas says, a lot of times

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stop-loss decisions are one of the final calls that winds up getting

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made in any given plan year.

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So it's so easy to face these really, actually very big decisions.

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While completely exhausted and inadvertently kind of phone it in.

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But yeah, don't do that.

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Big mistake.

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So I gotta tell you, this episode on this topic was really a long time coming.

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I wanted to talk with someone who kind of didn't have a horse in the race of selling

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stop-loss and also knows the stop-loss, what the, what's inside and out.

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This was no easy task.

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It was almost as hard finding someone for the show as it was to find someone

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to talk about 340B before I managed to find in shanghai, Shawn Gremminger.

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But I digress.

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I'm so pleased to be speaking today to Andreas Mang, who is senior

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managing director at Blackstone and CEO Equity Healthcare.

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I am also speaking today with Jon Camire, who is also over at Blackstone.

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Jon is managing director and CFO Equity Healthcare.

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Jon is an actuary and he runs their stop loss program.

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So yeah, you can see I'm bringing the big guns here.

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All right, logistics.

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This conversation about stop-loss is gonna be two shows.

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This show that you'll hear today will lock down the basic concepts, dispel

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some myths, including the nuances of laser claims, and wrap up with the

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hugest of huge, you better get this right or things can go horribly wrong.

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Which I'm not gonna keep you in suspense over the hugest of huge

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is pick a really, really good consultant and know how they are paid.

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It is easy to say this, and you might be, yeah, yeah, yeahing me.

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I've heard this before so many times.

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But after listening to Andreas and Jon talk through some of the stuff that

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we talked through today, it can be a scalding, really expensive hot mess.

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So, wow.

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Yeah, it just drives home why a really experienced unconflicted consultant

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matters with three underlines.

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The second show will cover major fails, mistakes that happen with stop-loss

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when somebody doesn't understand or do everything that we talk about.

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So tune back in for the next part of this convo, as I said, in two weeks.

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I will also mention the earlier show that I did with Andreas, it

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was about a year ago, comes up a bunch of times in the show today.

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We reference it because as I said, we talk a lot about the role of the broker

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in stop-loss and purchasing stop-loss, and we also talk at great length

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about brokers in that earlier episode.

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Link in the show notes as usual for your convenience.

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Normally right now I say my name is Stacey Richter, and then I say, this show

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is sponsored by Aventria Health Group.

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What I'm going to say instead today is that the show is also sponsored by Havarti

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Risk, which I am very thankful for.

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The show actually does cost an unexpectedly large sum of money

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to create and produce, so I always appreciate when somebody offers to

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sponsor a show or help sponsor a show.

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Havarti Risk empowers healthcare leaders like you to make smarter

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decisions that increase quality and lower the cost of care.

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Havarti's cutting edge approach combines deep industry knowledge and

00:05:49
also actuarial expertise with advanced technology to transform how you

00:05:54
manage risk and optimize performance.

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Imagine having the power to, number one, predict financial outcomes,

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both claim and admin with confidence.

00:06:04
Number two, measure performance across value-based care contracts in real time.

00:06:08
Number three, validate ROI on health innovations, ensuring better care delivery

00:06:13
at greater efficiency, like for example, build a tracking mechanism to measure and

00:06:17
validate ROI's, return on investments.

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And then number four, develop novel capital risk structures tailored to

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your organization's unique needs.

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So do please support Havarti Risk.

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You can visit them at their website, which we will link to in the show

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notes to take the first step toward greater visibility and control of

00:06:38
risk outcomes in your business.

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And once again, thank you so much to Havarti Risk for their

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financial support of this show.

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And with that, here's the first part of my conversation with Andreas

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Mang and Jon Camire about stop-loss.

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Andreas Mang, welcome to Relentless Health Value.

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Hey, Stacey, thanks for having me back.

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Happy to chat about stop-loss with you today.

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It is a pleasure to have you back.

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Jon Camire, thank you so much for being here today.

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Thank you, Stacey.

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It's a real pleasure.

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Why don't we start from the very beginning.

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Let's define terms here.

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What is stop-loss?

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For most people, they probably hear this and they are already asleep.

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Hopefully not.

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They're running for the hills.

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Yeah, they're running for the hills.

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I'm gonna encourage everyone to keep the play button hit and to listen

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to this because in as much as it may sound sort of mundane, or not exciting.

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It's probably one of the most important topics for a self-insured company because

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what it is, is stop-loss, really, it's a form of reinsurance, and it is the

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insurance that is purchased by an insured entity, and we'll talk about what that

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is, to protect against catastrophic loss.

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Okay, so it's the protective layer that essentially removes a tranche

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of risk for an insurer, and that insurer can be an insurance company,

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like a property and casualty insurer.

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I can assure you that those that insured the homes that were devastated

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by the fires out in California are probably covered by reinsurance.

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I'm sure they are.

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It could also be a self-insured entity, right.

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And the stop-loss, which is the reinsurance that a self-insured entity

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purchases, the amount that they purchase is relative to the size of the risk pool.

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So you're saying that if I say reinsurance or I say stop-loss, those are synonyms.

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I'd say stop-loss is a subset of an overall umbrella known as reinsurance.

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So reinsurance broadly is what we discussed.

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It's the insurance purchase to protect against catastrophic coverage.

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Underneath that umbrella of reinsurance, we have stop-loss and

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other forms of insurance that people can buy to protect against risk.

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There's insurance products for gene therapy if you want, but in general,

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stop-loss is a form of reinsurance that is a comprehensive form of

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insurance that should cover all expenses above a certain threshold.

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And we're basically saying that you are a self-insured

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employer or whoever's listening.

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If we're a plan sponsor here, we may be confident and capable of managing

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day-to-day kinds of risk, normal kinds of risk, but if something absolutely

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nuts happens, we can't bankrupt our whole company, so therefore we need a stop loss.

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We need some kind of coverage so that we protect in the chance

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that something really bad happens.

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That's the very simplistic explanation here.

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That's right.

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It's actually funny in healthcare coverage, what people are getting

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today from employers or from an insurance company, it really

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isn't insurance anymore, right?

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Insurance, by definition, should be low probability, high cost events,

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that's what insurance covers.

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Listen to the show with Ge Bai where we dig in on that exact concept.

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And I'd say stop-loss coverage is still one of the few pieces of this overall

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puzzle that still meets that criteria.

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low probability, high cost events

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Stop loss should be for those low probability, high cost events

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that a self-insured employer wants to protect themselves from.

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And quite frankly, it has been, historically, it's been one of

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the barriers to smaller companies going self-insured because this

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protection can be fairly expensive.

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Because why?

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Because I said before that the amount of protection that you buy

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is relative to the size of the risk pool that you are insuring.

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So if you are small, if you're a very small company, let's say

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you're 400 employees and you're self-insured, your appetite for

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risk is gonna be less than that.

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Of, say, a company with 5 employees and what is essentially

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your coverage, your deductible is going to be much lower than that

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of a company with 5 employees.

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So if you're 400 employees and you're buying stop-loss, you're gonna buy

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coverage that has a deductible that's quite low, probably in the, could be

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75, could be a hundred or $125 deductible, meaning that you're on

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the hook for the first, let's say the deductible is a hundred thousand dollars.

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They call it an attachment point, and this is for a form of stop-loss

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that we call individual stop-loss.

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There's actually two forms, I should have said that before.

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There's two forms of stop-loss for a self-insured entity.

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There's individual and there's aggregate.

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Individual says for an individual situation, an individual case,

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you the employer, are on the hook up to a certain threshold.

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Whatever that deductible is that we set, let's say in this case

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it's a hundred thousand dollars.

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If someone has something bad happen, they're going through cancer, for

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instance, you, the employer, will be on the hook for the first a hundred thousand.

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After that, you are free and clear.

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The stop-loss carrier is gonna pick up the rest.

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Now, if you're 5 employees.

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That deductible may be $750.

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It could be up to a million dollars because you're much bigger.

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You're more able to absorb those higher cost expenses within the

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overall budget of your plan.

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What I'm understanding you say is that stop loss obviously is it's protecting

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a self-insured entity, employer plan, sponsor of some kind against some

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kind of catastrophic situation or maybe situations that happen in any

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given plan year such that that plan winds up with way more expense for

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healthcare than they had budgeted.

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And it's interesting that you put a small employer at 400, which I know from

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the last episode you said was you're pretty much bottom for what you would

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consider someone should be self-insured.

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Is about 400 employees.

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So we've got a small 400 person employer here or a plan.

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And you said there's individual stop-loss and then there's aggregate.

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And if we're thinking about the individual, then if any claim exceeds

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for the smaller employer, maybe they're, you call it a deductible, which is kind

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of interesting because normally we think about deductibles as as patients, but

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if we're thinking about it at the plan level, this is the plan's deductible.

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At about a hundred K for that given individual.

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So you have one individual who has some kind of very high cost claimant.

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The stop loss carrier's gonna pick up anything that's above the a hundred

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K or whatever the floor is on that.

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And if it's a larger plan, then obviously they've got more money they

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can absorb a higher high cost claimant.

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So maybe it's 175 if it's a larger plan.

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Did I get that right?

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You got it right.

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And I'd add that if you're large enough, some companies go without it.

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So companies that are around, call it, eh, it's around 10

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or so employees on their plan, they actually can start thinking

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about completely eliminating this.

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The individual, you mean?

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The individual.

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So think of it as a, you know, Jon will probably talk about this, think

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of it as a risk management tool that we oftentimes will say, look, this decision

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needs to be, and I talk about this a lot, joint with finance and HR. I think

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everything with self-insurance should be a joint decision between finance and HR.

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But this really is a CFO decision because it is a risk management tool.

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It is a risk management decision.

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How much risk are we willing to take on the balance sheet of our company.

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Before we get to the next question where we talk about aggregate.

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Jon, do you have anything that you wanna fold in here to this conversation?

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I would just say that, you know, to put some numbers around what Andreas was

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just saying, when you have a company that has 10 employees, they could

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have a plan that's running $10 million a month in claims, and so you know,

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a claim that's 250 or 500, really isn't something that becomes

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catastrophic for their cash flow in a way that it does for a smaller plan

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that might be running 200 a month.

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They have a claim for $500, that's really a major hit on cash flow.

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And when you think about stop-loss insurance, and really what you're trying

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to do is understand the risk tolerance of your specific company, your cashflow

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needs, your cashflow limits, and put some insurance around it so that you

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do not result in a bad situation.

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And I think what you just did there is put an underline under what Andreas

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was just talking about, about how stop-loss is a risk management tool.

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This is all about understanding risk tolerance, and then finding

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a level of stop-loss coverage that seems suitable for that risk.

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And that sounds like something the finance department should be all over.

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So as you say that this definitely should be a joint decision with

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finance, I am cottoning onto that.

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That sounds like it is.

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Correct.

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Exactly.

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So we just talked about individual stop-loss coverage or stop loss

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coverage and how that impacts maybe an individual high cost claimant.

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You had also mentioned there's two kinds and the second kind is aggregate.

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So what's that all about?

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Sure.

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So aggregate is the second form of stop-loss.

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But this is all within one policy, right?

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So you have stop-loss and then you've got the individual component

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and the aggregate component, or is this a whole separate policy?

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It's really separate.

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It's a separate decision.

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So what aggregate insurance is going to do is it's gonna cap your overall risk.

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So it's gonna end generally with that's where that's set.

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It's generally set at about 125% of your expected cost, so it sort of sets a

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maximum or a ceiling that you as a company will pay in a given year and in general,

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aggregate reinsurance, aggregate stop-loss is purchased by smaller companies.

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When you get to be about a thousand employees or so.

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You generally see companies eliminating the aggregate policy and it's cheap.

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This is the piece that doesn't cost a ton, but it's also hard to engage it.

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So I asked our stop loss sort of administrator once,

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what's sort of the average?

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How many times do you see a company hit the aggregate stop loss?

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If you think about, again, it's at 125% of your expected, your forecasted amount.

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That's a pretty big miss.

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If you're hitting that, they said one out of a hundred years

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you're gonna hit it as a company.

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So it's nice to have it.

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It gives people peace of mind.

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It doesn't cost much, but in general, you're not gonna hit it.

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Think about what you would need for that to happen.

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You have an individual policy in place.

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Let's say it's a hundred thousand dollars individual policy.

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To hit aggregate, you'd have to have something really strange happen where

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you have a whole bunch of cases that are just coming in right below that where

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individual may not be kicking in and a whole bunch of somethings happened

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that sort of ended up where you were way beyond your budget or, or you did

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a poor job before forecasting your expenses, which could also be the case.

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But again, in general, aggregate is something that goes away once you're

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large enough because why, you know, basic principle of insurance, the

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larger the risk pool, the easier it is to kind of forecast and

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understand where things are gonna go.

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Yeah.

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This sounds like a lot of really heavy duty looking at past trends,

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trying to figure out exactly like you just said, what is the risk here?

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So I'm glad we have an actuary in this conversation.

00:18:05
Well, so am you know, this brings legitimacy to this whole thing.

00:18:09
But look, you know, we've talked, we talked about this last time, you had

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me on the importance of having a good broker, a good partner, because the, we

00:18:16
always say the math gets so much more complicated when you're self-insured.

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And for those who maybe didn't hear the first time I was with you, Stacey,

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you know I talked about self-insurance.

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As companies are running their own health insurance company, when you

00:18:30
are self-insured, you're running your own health insurance company.

00:18:33
You need to be able to forecast risk appropriately.

00:18:35
You need to be able to forecast where are the potential areas where you

00:18:39
could get hurt sort of financially.

00:18:42
What are these protective layers of insurance that you need to make sure

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that your plan is run in an efficient way, in a smart way, in a way that

00:18:50
protects you as the self-insured entity?

00:18:52
It gets complicated, right?

00:18:53
And this one right here is square in the bullseye of where problems can occur.

00:18:58
And Jon will talk about this in a bit, but we have seen some really interesting

00:19:03
things in our time here over the years where companies are not structured

00:19:06
properly with this insurance and they face some real, you know, unforeseen expenses.

00:19:11
So it's important to get this one right.

00:19:12
It is complicated.

00:19:13
And this one really highlights this sort of notion that when

00:19:17
you're self-insured, you're really running your own insurance company.

00:19:20
And stop-loss is one of these key provisions that all insurers have.

00:19:24
Right?

00:19:24
So if the insurers are doing it, you better be doing it as well in

00:19:27
the situations where it makes sense.

00:19:29
Yeah, because you buy too much, you wind up spending a lot of unnecessary

00:19:33
dollars and kind of mitigate the whole point of, not the whole but a point

00:19:38
of being self insured to begin with.

00:19:41
But you don't spend enough, you can get in a lot of trouble if the worst winds

00:19:46
up happening in any given plan year.

00:19:48
It's such a great point.

00:19:49
Stacey, I just wanna highlight what you just said.

00:19:51
We've seen so many companies who in their first year of going

00:19:55
self-insured, they're nervous, right?

00:19:57
They're a little apprehensive about taking on this risk.

00:19:59
And oftentimes we see companies who initially have the knee jerk

00:20:03
reaction to over insure, and this coverage is expensive, you

00:20:07
know, make no mistake there.

00:20:08
And so, choosing the right levels and having a partner who can help you with

00:20:12
that math and project your risk and do it in a way that is best for you and your

00:20:17
situation is really important because it can completely turn the economics

00:20:21
upside down of going self-insured.

00:20:24
Just to add new company going self-insured.

00:20:26
Everything about stop-loss is gonna be unfamiliar.

00:20:30
All the terms, all the decision points are gonna be unfamiliar for

00:20:35
a company that has just been making decisions in a fully insured world.

00:20:39
And so, you know, you may not really understand where the blind spots are, and

00:20:44
that's where that consultant comes in.

00:20:46
So important.

00:20:47
And I also could see, again, just kind of going back to the whole, who within any

00:20:52
given plan, sponsor owns this whole thing.

00:20:55
I mean, finance is actually making a lot of these types of decisions

00:20:59
for all the other insurance they're buying, which probably is coming out

00:21:03
of the finance department, right?

00:21:05
Like for their property, for workers' comp, like for all those other things.

00:21:10
So like as we talk about these unfamiliar words, they could be very unfamiliar

00:21:14
for someone in HR who likely did not go to get a human resources education

00:21:19
to, as you say, run a small insurance company off the side of their desk.

00:21:23
Right.

00:21:23
But at the same time, like this is sort of very financey,

00:21:27
even just in terms of language.

00:21:29
Alright.

00:21:29
What's a laser claim?

00:21:31
What an awful title.

00:21:33
What an awful name for a piece of this overall game.

00:21:37
So what a laser claim is this, if you think about, if you put yourself

00:21:41
in the shoes of the reinsurer, the stop-loss carrier, they like, you

00:21:46
are also projecting risk, right?

00:21:48
So they're looking at your claims data.

00:21:50
They're trying to understand what's their exposure, and in turn, they then

00:21:54
wanna price your policy appropriately.

00:21:57
What a laser is, is when there is a known risk.

00:22:00
So let's say someone is going through some kind of a prolonged treatment.

00:22:04
Again, let's use the example, I hate to use it, but you know, it's

00:22:07
appropriate for the, for the discussion.

00:22:09
Someone is going through cancer.

00:22:11
And let's say they started treatments in November and they're gonna be

00:22:15
flowing into the next year, and your plan year follows the calendar year.

00:22:18
So you're facing a renewal and you go to the market and you're

00:22:22
looking for a new policy or you're looking for a renewal rate.

00:22:25
That reinsurer, the stop-loss carrier is going to see that risk in your population

00:22:31
because they have your claims data.

00:22:33
And that's the equivalent of knowing if you're a property and casualty

00:22:36
insurer, that's the equivalent of knowing an earthquake is coming, right?

00:22:39
So you see that risk, you see that that cost is in there, and what

00:22:42
a laser does is it pulls out that individual person from the risk pool.

00:22:48
And in general, what they usually do is they set a different

00:22:51
deductible for that individual.

00:22:53
So your individual stop-loss policy may be set at, let's say, you know, $350

00:22:59
deductible, but for that person, that individual, they laser them out, and that

00:23:03
person may have a $500 deductible.

00:23:06
So you are on the hook for a greater piece of the overall cost.

00:23:09
That's what a laser is.

00:23:10
It's pulling out known risks, and it's assigning a different financial

00:23:15
threshold to that known risk.

00:23:17
So basically if there is an individual or individuals who, they're crossing

00:23:23
the plan period, as you said, right?

00:23:26
Like they start a treatment or have some kind of chronic something

00:23:29
or other where they begin in one plan year, but then it crosses the

00:23:34
renewal period of the stop loss.

00:23:35
Exactly like you just said, the stopwatch carrier's, like, I'm onto you.

00:23:38
I see that is gonna happen.

00:23:40
So at this juncture, you don't need insurance.

00:23:43
You need someone to pay your bill.

00:23:45
If I'm just thinking about it from a, you know, from the perspective

00:23:49
of this other entity that is on the sales side of the equation and on

00:23:54
the, on the hook side of the equation.

00:23:57
So a laser claim is them basically saying, you're gonna have this expense and you

00:24:01
need to figure out what to do with it.

00:24:02
Like at this juncture, it's not insurance, it's a known entity.

00:24:06
As you said perfectly, it's no longer insurance.

00:24:08
It's a known thing.

00:24:09
Now, you know, obviously something that's episodic and that you expect to

00:24:13
resolve hopefully in a positive way.

00:24:15
On the employer's side, they're trying hard to say, Hey, this, this is either

00:24:19
their, the individuals at the end of their treatment or they've gotten

00:24:21
better, or the claims you're seeing are no longer gonna be caring forward.

00:24:25
The employee may no longer be with the company.

00:24:28
There's a number of discussions that happen to understand where that person

00:24:31
is versus, and you just said this as well, someone who's chronic, right?

00:24:35
A hemophiliac who's gonna be on the plan is, we know is going to generate quite

00:24:40
a bit of, expense going forward that's gonna carry on for the foreseeable future.

00:24:46
That, that is gonna be treated slightly differently as well.

00:24:49
But, but in a, you know, in a nutshell, you, you nailed it.

00:24:52
That's what a laser is.

00:24:53
I wish it had a different name.

00:24:55
It sounds a little too exciting maybe for what it actually is, which is not good,

00:25:02
generally speaking for both the company as well as the individual that is involved.

00:25:06
So Jon, before we move into the next question I have for you, which I'm very

00:25:12
excited to get to, is there anything that you wanna kind of add in summary

00:25:15
for what we just talked about there?

00:25:17
Yeah, look, I would say that a laser, it sounds like it's bad, but actually there

00:25:22
are situations where companies should be pleased that a laser is being offered.

00:25:27
So basically what that means is the insurance company underwriters for

00:25:31
that company have evaluated that risk and they feel like there's a greater

00:25:36
risk there than they wanna accept.

00:25:38
So they're gonna ask for a high deductible for that individual.

00:25:41
But what that means is they're not gonna build that into the premium.

00:25:44
So the alternative is they don't laser that claimant and then they

00:25:48
just throw a couple hundred thousand extra onto the premium and you

00:25:54
don't really know the difference.

00:25:55
So, you know, one of the things I think is an important principle with stop-loss

00:26:00
is to, you know, market and get different perspectives from different carriers.

00:26:04
But we've certainly seen situations where accepting the laser on one

00:26:09
policy is a 100% financial winner relative to another policy that's being

00:26:15
offered that doesn't have a laser, but just has a much higher premium.

00:26:18
So, these situations are all unique.

00:26:21
They're all individualistic.

00:26:22
You have a variety of different clinical factors, financial factors, all kinds

00:26:27
of things, but each one is individual.

00:26:29
You have to evaluate them each year, each policy, and then make a good decision.

00:26:34
Yeah, so that's really interesting that if you get a stop-loss carrier,

00:26:37
like I'm, here's a totally exaggerated reenactment, but the employer might

00:26:41
be like, oh no, don't laser my claim thinking that that's a good thing.

00:26:45
And the carrier's like, sure.

00:26:47
And then they just added into the premium what the employer would've

00:26:51
paid for anyway, probably with some additional dollars there.

00:26:55
I mean, basically the, what the employer may have just purchased

00:26:58
is a very expensive payment plan.

00:27:00
Absolutely.

00:27:01
That's exactly what happens.

00:27:02
The margin on these products is high.

00:27:04
So if it's as an Andreas example, 350 versus 500, they're not just

00:27:09
gonna add 150 to the premium.

00:27:11
They're gonna add, you know, 250 to the premium and

00:27:15
that's what you're gonna eat.

00:27:16
And we've certainly encountered companies that are like, we hate lasers.

00:27:20
We don't like lasers.

00:27:21
And you know, obviously in isolation, sure.

00:27:23
But each situation needs to be evaluated individually.

00:27:27
So my next question for you, Jon, is what's most important here to know?

00:27:33
Like if you were going to select a tip-top rate critical, what would it be?

00:27:39
We just talked about how it'd be important to know stuff like, Hey, not

00:27:44
all lasers are a bad thing , and I am inferring from what Andreas mentioned,

00:27:49
that a good broker or consultant would know about stuff like this.

00:27:53
But what's most important here?

00:27:55
Well, there's definitely a few things.

00:27:57
I think actually right in your question, maybe the top thing, it's time.

00:28:02
You know, when you're stepping up to evaluate self insurance or even

00:28:05
considering evaluating self insurance, it's really time to take a hard look

00:28:09
at who your consultant is and maybe at that point you're calling 'em a broker.

00:28:13
I really feel like once you get into self insurance, the consulting

00:28:17
piece becomes more critical, right?

00:28:20
The math gets a little harder.

00:28:22
The work gets a little more complicated.

00:28:23
You have more flexibility and stop-loss is only one of those areas.

00:28:26
But one of the things I like to say to companies that are in this space where

00:28:31
they're considering self-insurance is, when you're fully insured, it's a lot

00:28:35
like ordering a meal at a restaurant.

00:28:37
You're looking at the menu, you see the prices, and you're making a decision.

00:28:40
With self-insurance, it's a lot like going to the grocery store, picking

00:28:44
out groceries, cooking the meal.

00:28:47
It's more complicated.

00:28:48
It's likely to cost you less at the end of the day than going out to the restaurant,

00:28:52
but the person or the consultant that can help you do that, I like to say it's

00:28:57
not the same person that can order a good steak, that can cook a good steak.

00:29:01
And so that's really where comes in.

00:29:02
That consultant is gonna be critical.

00:29:04
All right, so we have gone through today, we have talked about what stop-loss is.

00:29:09
We have talked about these terms that wind up getting bandied

00:29:12
about relative to stop-loss.

00:29:14
We have talked about making sure that the consultant knows what they're

00:29:17
doing because this sounds very much like something that one would need an

00:29:21
experienced guiding hand to accomplish.

00:29:24
Is there anything that we neglected to talk about that we wanna bring up today?

00:29:28
The one thing I wanted to add is make sure you know what your consultant is getting

00:29:33
paid, and if you're using some type of collective or captive or whatever, make

00:29:38
sure you know what they're getting paid.

00:29:40
Over the years, we've seen some questionable behavior when it comes

00:29:43
to commissions on stop-loss because it's not an employee benefit.

00:29:47
It's not reported on 5500s.

00:29:50
If you have that reputable broker.

00:29:52
You're doing disclosures and things like that, you're probably okay.

00:29:56
Same thing with a strong collective.

00:29:59
Definitely know what these people are being paid on this coverage.

00:30:02
Yeah, I think that's really good points.

00:30:04
Andreas, anything that you wanna add as a wrap up here?

00:30:07
This stuff is complicated.

00:30:08
I hope it doesn't scare anyone away.

00:30:09
I hope this helps clarify some of the important points that you need to look at.

00:30:14
And it's just, it's a really integral, important part of the overall

00:30:17
self-insurance equation that is too easy to sort of view as that last buying

00:30:22
decision that we talked about and sort of you wanna sweep it under the rug.

00:30:25
It's probably one of the most important buying decisions.

00:30:28
Unfortunately, it happens at the way end of the process when everybody's really

00:30:32
tired and beat up and you know, you gotta hang in there and get through this one

00:30:35
and put as much into it as every other part of what you've done to sort of

00:30:39
structure your plan for your employees.

00:30:42
Okay, you listening right now, consider yourself informed about the basics now.

00:30:47
So let me tell you what you gotta do in two weeks.

00:30:50
Tune in and listen to part two of this discussion where, yeah, we talk about

00:30:54
the biggest mistakes plan sponsors make when it comes to stop-loss and a bunch

00:30:59
of other, I don't know, pretty, for me, at least, unintuitive and also rarely

00:31:05
discussed aspects of this whole conundrum.

00:31:08
Just as unintuitive as, Hey, sometimes a laser isn't a terrible thing if

00:31:13
you think it the whole way through.

00:31:14
So see on the other side.

00:31:17
Andreas Mang and Jon Camire, thank you so much for being on

00:31:20
Relentless Health Value today.

00:31:21
Happy to be here.

00:31:22
Thanks so much for having us.

00:31:23
Thank you, Stacey.

00:31:24
Hi, I'm Keith Passwatter, an actuary Havarti Risk.

00:31:27
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