Research Methodology
How We Research Stop-Loss Insurance
Stop-loss insurance is the financial foundation of every self-funded plan. Getting the carrier, deductible, and contract terms wrong can expose an employer to catastrophic liability. This page documents our carrier evaluation criteria, deductible sizing methodology, contract term analysis framework, and the limits of our research.
01 — Editorial Standards
Independence from stop-loss carrier relationships
Stop-loss carriers and MGUs actively market to benefits consultants and brokers. Our editorial policy prohibits any commercial relationship that could influence carrier coverage.
No carrier advertising
We do not accept advertising, sponsored content, or placement fees from stop-loss carriers, MGUs, or reinsurers. Carrier profiles are based on market presence and employer relevance.
Rate data sourcing
Stop-loss rate benchmarks are drawn from published actuarial studies, broker market surveys, and employer-reported renewal data. We do not use carrier-provided rate benchmarks.
Laser analysis
Laser frequency and severity data is drawn from employer-reported experience and published actuarial research. We do not accept carrier-provided laser statistics.
Claims payment data
Claims payment performance data is drawn from employer-reported experience and state insurance department complaint data. We do not use carrier-provided claims performance statistics.
02 — Carrier Evaluation
How we evaluate stop-loss carriers
Stop-loss carrier profiles are built from AM Best ratings, state insurance department filings, employer-reported experience, and published actuarial research.
| Criterion | Priority | Methodology note |
|---|---|---|
| AM Best financial strength rating | Critical | Minimum A- (Excellent) for any carrier considered for a self-funded plan |
| Claims payment history | Critical | Employer-reported claims payment speed, dispute rate, and advance funding availability |
| Laser policy | High | Laser frequency, laser cap provisions, no-new-laser guarantees at renewal |
| Run-in / run-out provisions | High | Contract basis (paid vs. incurred), run-out period length, terminal liability coverage |
| Advance funding | High | Whether the carrier advances specific claim payments before the plan year ends |
| Renewal rate history | Medium | Historical renewal rate increases relative to market; rate cap provisions |
| Minimum premium programs | Medium | Availability and terms of minimum premium arrangements for smaller groups |
| Aggregate accommodation | Medium | Monthly aggregate accommodation availability and terms |
03 — Deductible Sizing
How our deductible sizing methodology works
The Stop-Loss Sizing Calculator uses actuarial heuristics to estimate appropriate specific deductible ranges. This section documents the factors and their limitations.
Group size (covered lives)
Larger groups can absorb higher specific deductibles; smaller groups need lower attachment points for cash flow protection
Claims volatility history
Groups with high-cost claimant history need lower specific deductibles; stable groups can carry more risk
Cash flow capacity
Monthly claims run-rate and the employer's ability to fund claims above the specific deductible without disruption
Aggregate attachment point
The relationship between specific and aggregate deductibles determines total maximum exposure
Industry risk profile
High-risk industries (construction, manufacturing) warrant lower specific deductibles than low-risk office populations
Carrier laser history
Groups with known high-cost claimants must model laser scenarios in deductible sizing
Deductible sizing outputs are heuristic estimates based on population-level actuarial research. They are not a substitute for a group-specific actuarial analysis. A licensed actuary reviewing your specific claims history, demographics, and carrier quotes will produce a more accurate deductible recommendation.
04 — Contract Terms
Key stop-loss contract terms and how we analyze them
Stop-loss contract analysis focuses on the terms that most frequently create unexpected employer liability — run-in/run-out, lasers, advance funding, and aggregate accommodation.
Contract basis
Paid vs. incurred basis determines which claims count toward the deductible. Paid basis is generally more favorable to employers.
Run-in period
Claims incurred before the policy period but paid during it. Run-in coverage eliminates the gap when switching carriers.
Run-out period
Claims incurred during the policy period but paid after it ends. Longer run-out periods reduce terminal liability exposure.
Laser provisions
Carriers can exclude or increase the specific deductible for known high-cost claimants. No-new-laser guarantees are the gold standard.
Advance funding
Carrier advances specific claim payments before year-end. Critical for cash flow management on large claims.
Aggregate accommodation
Monthly aggregate accommodation provides cash flow protection before the annual aggregate deductible is met.
Renewal rate caps
Contractual limits on renewal rate increases. Rare but valuable for budget predictability.
Terminal liability
Coverage for claims incurred before policy termination but paid after. Critical when switching carriers.
05 — Benchmark Data
Where our stop-loss benchmark data comes from
Stop-loss rate and claims benchmarks are drawn from published actuarial studies and broker market surveys.
Sun Life Stop-Loss Research Report
Annual analysis of stop-loss claims trends, high-cost claimant drivers, and specific deductible adequacy.
Milliman Medical Index
Annual actuarial analysis of employer healthcare cost trends used to contextualize stop-loss rate movements.
SIIA (Self-Insurance Institute of America) Market Data
Industry association data on self-funded plan prevalence, stop-loss market size, and carrier market share.
Broker market surveys (Gallagher, Mercer, WTW)
Annual stop-loss market surveys documenting rate trends, carrier appetite, and laser frequency.
State insurance department complaint data
Public complaint data used to assess carrier claims payment performance and dispute rates.
06 — Limitations
What our stop-loss research cannot tell you
Stop-loss is a highly individualized product. Our methodology has specific limits every employer should understand.
Real-time carrier pricing
Stop-loss rates are quoted individually based on group-specific claims experience, demographics, and carrier appetite. Published benchmarks reflect market averages, not what any carrier will quote your group.
Laser prediction
We cannot predict whether a carrier will laser a specific claimant. Laser risk depends on the claimant's diagnosis, prognosis, and the carrier's underwriting guidelines — all of which change.
Actuarial certification
Our deductible sizing tool produces heuristic estimates, not actuarial certifications. A licensed actuary must review group-specific data to certify deductible adequacy.
Contract legal review
Stop-loss contract analysis identifies provisions of concern. It does not constitute legal advice or a legal opinion on contract enforceability or coverage disputes.
State regulatory variation
Stop-loss is regulated at the state level, and state requirements vary significantly. State-specific guidance requires local counsel and a broker licensed in the relevant state.