Originally Posted by leevena
A good point to be made. But if you construct the plan correctly, including a time limitation on when claims need to be filed, your example will be a non-issue for the employer.
I used to think that however, a COBRA
eligible group per federal law is primary with Medicare and per federal law, the employer would eat the claim. This happened on a large fully insured group and we simply dropped it on the carrier. Stop losses would have run out unless they had a 12/36 or 48 contract.
One reason HDHPs were so good for individuals isn't that you get a spec = the EE out of pocket and an agg = the family OOO.
Another issue with self funded isn't no carrier isn't required to offer a renewal and can exclude coverage on a particular insured.
We also had an employer in financial trouble that went ASO against our recommendations because they could hold the reserves. The problem came when the contract ended. An ASO contract is for 12 months with monthly payments. They couldn't renew because the plan ended and they had no one to administer the run out.
Another company with young employees bought administration and a network with no stop loss at all - not even an agg. They ran fine - until they didn't. "Didn't wiped out more than they saved.
People selling self funded say "If it's set up right" or "almost never happens".
Insurance is statistics and we are a random variable. Be careful and understand what you have (and sell).