Stop-Loss Prescription Coverage
Wednesday, June 8, 2011 |
posted by Lori Power |
Stop-Loss Prescription Coverage
Earlier this year we were pleased to release a stand-alone, stop-loss insurance specifically designed to cover catastrophic prescription needs up to $25,000 per person in the household.
Prescription stop-loss is intended for the high cost, unplanned catastrophic eventualities, not the everyday antibiotic pharmaceuticals or annual dental cleanings.
Unlike other aspects of the health care system, there is no universal coverage in place for prescription drugs. Nevertheless, they are a common household expense, with over 300 million prescriptions filled each year—about 10 for each man, woman and child. Although some employers may consider purchasing stop-loss coverage an unnecessary expense compared to more traditional style benefit plans, there are significant savings to be had by strategically building a benefit plan on sound principals of coverage and cost containment, including stop-loss coverage.
Results vary from one province to another but in a recent analysis, we compared a fully insured benefit plan with that which utilized the best providers for each category of coverage. This plan looked at Life Insurance, AD&D, Dependent Life Insurance, Long-Term Disability (LTD), Prescription Drug (Rx) coverage, Extended Health Care (EHC), Emergency Travel and Dental Care. No Short-Term Disability, no Critical Illness, and no Vision Care service.
Apples to apples on the plan design, we looked at the same insurance carrier for the Life, AD&D, Dependent Life and LTD. We utilized at a self-insured, administrative services only plan (ASO) for EHC and Dental; used the RBC Group Travel for the Emergency Travel Assistance and our new Stop Loss coverage for the pharmaceutical coverage.
The Emergency Medical Assistance our plan offered, through RBC as a stand-alone product, is $2.89 for a single employee and $6.59 for family. Due to volume pricing we are able to offer this at a significant discount to anyone else in the marketplace.
Using an ASO product for health and dental means the costs are based on claims plus administration. If there are no claims, there are no costs to the company. There are no sign-up fees, no transactional fees and no monthly costs. Simply administration on claims. An insured plan for these benefits charges on the premium regardless of usage and the typical savings for a company using an ASO product, depending on circumstances, is roughly 15-20%.
Factoring in the Prescription Stop-loss, non-medically underwritten at $26 per single and $61 per family per month, we were able to save this company 22% over the fully insured plan, with no loss of coverage.
One may think using so many carriers/providers would complicate the benefit plan but that is not so. These are our provider partners behind the scene and to the end user, our client, it is one plan, working to ensure the best coverage is available from the very best providers of that coverage. Segmenting a plan like this ensures accuracy in pricing for each component of the benefit plan and allows our clients to see and budget their costs from one year to the next with little to no surprises, while at the same time, ensuring the best coverage is available for their employees.
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