Background:

The current Medical Stop Loss Insurance policy with HMIG (a Florida Blue partner) has a self-insured retention (deductible) of $750,000 and will expire on 12/31/2023.

Renewal

An RFP for Stop Loss Insurance was issued by the district’s insurance broker, AON. Proposals were requested at the $750,000, $775,000, $800,000, $1 million retention levels, as well as a $750,000 with aggregating specific of $250,000. Five carriers declined to quote (QBE, Symetra, Swiss Re, TMHCC and Voya), and two other carriers (HMIG and SunLife) provided proposals based on the district’s medical claims experience through August 2023.

Unfortunately, this year’s renewal is affected by the district’s 2023 claims experience that includes two high-cost claims that reached the stop loss limit of $750,000. One of the claims was over $1.1 million and has since closed. The other is over $3.9 million. This claim is for multiple organ transplants with complications. The member is currently in the hospital, re-admitted for infections and is not expected to be released in the near future. Since the stop loss contract is based on the claims paid date vs. incurred date, it is expected the district will incur claims in 2024 for this member, due to the lag in claims review and processing.

The HMIG renewal at the $750,000 retention was quoted with a 50% increase over the expiring premium with no lasers* for a total of $1,151,368. The SunLife quote at the same level was a 48% increase with a $1.9 million laser specific to the one mentioned above. With the laser, the net projected cost would be $1,881,916 over the current premium. SunLife quoted all other levels with the $1.9 laser. Since SunLife included the laser at all levels, SunLife’s quotes are not competitive.

After reviewing all the HMIG quotes and factoring in that the high-cost claimant is currently in the hospital and will most likely have significant claims paid in 2024, the HMIG $750,000 retention with the aggregating specific deductible of $250,000 with no laser is the best option for this year’s renewal. This option offers a savings of $307,620 over the HMIG renewal quote at the $750,000 retention with a net projected savings of $105,260.

With an aggregating specific deductible, this district will pay reduced stop-loss premiums in exchange for taking on more risk of a set dollar amount. The district will opt for $250,000 in order to keep the Individual Specific Deductible at $750,000. The aggregating specific is in addition to the Specific Deductible that is already in place. The Aggregate Specific Deductible covers the entire group and must be satisfied before the district can get reimbursed. Only claims more than the Specific Deductible are applied to the Aggregate Specific Deductible. Once the Aggregate Specific Deductible is met, any additional eligible claims over the Specific Deductible will be reimbursed.

*Laser is a specific retention or deductible for a specific high-cost claimant

**Stop Loss Credit: Assumes Florida Blue/HMIG is retained as stop loss provider and they provide a $0.50 PEPM stop loss credit to their monthly ASO invoice (annual amount of $32,670 at current enrollment). If they are not retained for 2023 stop loss, the ASO credit will not apply.

LYNN PETERSON   lynn.peterson@sarasotacountyschools.net

ALLISON FOSTER   allison.foster@sarasotacountyschools.net

CHRIS RENOUF   chris.renouf@sarasotacountyschools.net