Stop Loss Paid Claims Analysis 2021: Insights from our book of business

Rising medical costs continue to be a cause of concern for many employers. Looking at aggregate data across a wide range of employee populations can bring valuable insight to Stop Loss contracts and cost containment programs.

The data points here are based on our book of business, which includes employers covering a total of 2.1 million employees. This includes the largest catastrophic claims that we paid, as well as how frequently we saw those types of claims in employee populations.* 

We offer this information to help employers more appropriately mitigate risk and set the proper medical plan funding.

The 10 largest claims

Premature births and complications with pregnancy remained steady as a top 10 claim in 2020. As noted in this table, they made up 6 of the 10 largest claims.  

Trend to watch: Rising medical costs
The largest claim in 2020 of $9,360,970 was significantly larger than the largest claim in the prior year of $6,253,918. Not only that, but taking the average of the remaining 9 largest claims in 2020, that amount of $44,298,198 was larger than the average of the remaining 9 largest claims (excluding the absolute largest) in the prior year of $39,264,822. We also expect to see high-cost claims due to newly-developed specialty drugs and cell/gene therapies to emerge in the top 10 in the coming years.

The most frequent claims

Taking a look at the most frequent claims can help employers estimate what they might see in high cost claims for their population. For example, using the data below, if an employer has a population of 3,000 employees, they might see roughly $2.7 million in high cost claims:

Frequency of Stop Loss claims

Trend to watch: Increasing claim frequency
While claim frequency is up from last year (18.2 up to 18.6), average claim size is down. Cancer claims continue to make up the largest number of claims submitted and the largest percentage of total claims costs. The average claim cost, in line with medical trend, is expected to continue rising in coming years.

Individuals exceeding Stop Loss deductibles

We’ve also continued to see an increase in individuals exceeding the Stop Loss deductible at growing rates across different deductible levels. Individuals exceeding Stop Loss deductibles from $100,000 to $750,000 have increased at an annualized rate ranging from 4%-9% from 2017 to 2020, which is roughly in line with the 2016-2019 rates that we reported last year. We expect this to continue to increase annually, on average.

The impact of COVID-19 on Stop Loss claims

In 2020, much of the medical community—and the world—was focused on COVID-19. We were as well, and kept a close eye on the impact to Stop Loss claims. However, we did not see a material impact on Stop Loss claims due to COVID-19 in 2020. 
•    We paid out $14,946,306 in excess claims thus far in 2020 due to COVID-19 diagnoses.
•    In addition, we’ve paid out $11,214,678 in excess claims thus far in 2021 due to COVID-19 diagnoses.

We do not expect COVID-19 claims to be material to the book moving forward past 2021, due to the wide availability of vaccines. We will still continue to monitor the impact of the pandemic.

We’re here to help you stay on top of trends

Other notable trends we’re watching include cell and gene therapy, changing legislation, and a competitive Stop Loss market. We’re here to offer additional insights along the way. Reach out to a Voya representative to learn more. 

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Excess Risk (Stop Loss) Insurance is issued and underwritten by ReliaStar Life Insurance Company (Minneapolis, MN) and ReliaStar Life Insurance Company of New York (Woodbury, NY). Within the State of New York, only ReliaStar Life Insurance Company of New York is admitted, and its products issued. Both are members of the Voya® family of companies. Voya Employee Benefits is a division of both companies. Product availability and specific provisions may vary by state.

*The data included here reflects policies effective January 2, 2019 with coverage through January 1, 2020 and claims completed through April 30, 2021.