Understanding advance funding provisions for medical stop loss claims

Employers who self-fund their employees’ medical coverage enjoy flexibility and cost-savings that fully insured coverage may not provide, but they must be prepared for sometimes shockingly large claims. These employers typically rely on medical stop loss insurance to help them cover claims that are higher than expected. But stop loss is a reimbursement, and the employers must make the initial claims payments themselves. For employers operating on slim margins or limited budgets, a sudden and unexpected catastrophic claim could be difficult to pay, and may even require a short-term loan. Fortunately, many stop loss carriers include advance funding provisions in their contracts that can accelerate the reimbursement of qualifying catastrophic claims.

To learn more about advance funding – including how it works and what to look for in a contract – check out our recent Inside Track educational paper.