Large Group Question

[ABC]

You make some valid point but how can you self fund a case like this with high claims and not get lasered?

How did this turn out?

All the advice here seems correct but I would think that the most important factor would be to determine what is/has been driving the poor claims experience. With multiple years of 200% L/R's, it seems fairly likely that large claims, at least in part, are driving the experience. With multiple carriers declining to quote, large claims are very likely prevalent.

It would be very important to get your hands around the number and nature of the large claimants. That is what I would do and that would determine the right course of action, not only at the current renewal but over the next year or two.

My advice would be to partner with someone who has access to self-funded markets (a TPA or large group specialist) and go from there. While the group isn't all that big at 80 EEs, self funding should be an option now, or in the future. You may be able to find an appropriate self-funded option with separate Spec levels for the large claimant(s). Then again, you may not.

The key is that even if the high fully insured renewal may very well be the best (or only) recommendation, at some point the large claims will resolve in full or in part, and you will have a reasonably manageable group health risk. I would not wait until that time to start to manage the health risk of the group. At that point, anyone who can get a quote can do as good a job as the incumbent broker.

 

[bukev1]

im fairly certain that Cigna's partially self funded product does not allow for lasering...

one other item to note, if healthnet is a local CA based HMO that offers lower group rates vs the big boy carriers then it will be hard to beat their premiums. These local HMO's have smaller networks and thus less provider access which leads to lower premiums.

 

[Bruce]

You make some valid point but how can you self fund a case like this with high claims and not get lasered?

You probably can't unless the large claim(s) are closed; deceased, off plan, acute and over, ....

I don't think there's anything wrong with lasering, as long as it makes sense.

I just know from many years group repping that a "200% loss ratio" really means not much without knowing what's going on with the group.

If the carrier is pooling internally at, say, 50k and 15-20% of the premium goes to the pool an overall (pooled) l/r of 200% with a non-pooled l/r of 50% is way different than a group with, say, both pooled and non-pooled l/rs of 200%.

A lot of times, a carrier gets killed by large claims (say for a couple years like the OP's client) and doesn't want the group anymore, even if it may now be all cleaned up.

It really depends on what the carrier is willing to write off to the pool when they are doing the renewal.

 

[somarco]

In a self funded plan the specific is there to protect the aggregate. Claims xs of $X do not count against the agg and do not factor in to the loss ratio.

If the underwriter did their job there should never be an agg hit or anything close to a 200% loss ratio.

I handled large group cases for about 20 yrs and almost never had an agg hit and never had a loss ratio anywhere close to 200%

 

[VolAgent]

In a self funded plan the specific is there to protect the aggregate. Claims xs of do not count against the agg and do not factor in to the loss ratio.

If the underwriter did their job there should never be an agg hit or anything close to a 200% loss ratio.

I handled large group cases for about 20 yrs and almost never had an agg hit and never had a loss ratio anywhere close to 200%

Well come on. How many big claims can you have when your biggest expense is couch time for a guy who says this burning bush keeps talking to him?

 

[somarco]

Gee thanks for the sarcasm Kirby.

Define "big" claim.

Largest claim I had was $4 million years ago when $4 million was a lot of money. Lady burned in a house fire. The hospital where she worked was on the hook for $250k, we paid the rest.

The $4 mil bridged 2 yrs so actually the hospital paid $500k total and we took it in the shorts.

Had a handful of claims in the $1 million range but most of those allowed $125k or less toward the agg.

 

[VolAgent]

That would definitely qualify as a monster claim. I can only imagine the agony she must have gone through if the bills ran that high. I've met a few people who've had very serious burns, I definitely don't even them.

 

[somarco]

I have had some large claims over the years, mostly serious illness and several accidents but that one is something I would never wish on my worst enemy.