With a renewed interest in self-funding employee health benefits, we have also seen an increased interest in stop-loss coalition development among brokerages of all sizes. These coalitions, also known as preferred partner arrangements or block consolidation, essentially reduce the number of vendors being utilized for stop-loss placement and position the retailer for a competitive advantage when placing medical stop-loss.
The Benefits of Consolidation
Favorable underwriting policy provisions based on a critical mass of business—the greater the profits, the greater the leverage for benefits professionals.
Better terms with preferred stop-loss partners than benefit professionals might get negotiating with different carriers on each client independently.
Better service agreements.
A menu of stop-loss providers designed to meet specific needs.
Differentiation, allowing benefits professionals to market their advantage over those who can’t offer the same consolidation benefits. This can lead to better closing ratios and higher persistency.
How to Choose Your Consolidation Partners
In addition to experience and the right mix of stop-loss providers, look for competitive pricing and flexibility; you may need a partner who can design a product around a specific need, so it’s important to be clear on what you are looking for. Remember that MGUs work with multiple carriers, which could enhance your program with diversification through a single, convenient underwriting entity.
As the ACA continues to impact the benefits market, it’s important to be aware of all of your options in order to continue delivering top-notch service for your clients. If you are interested in block consolidation for stop-loss clients, considering the benefits, careful planning and thoughtfully choosing the right partner are critical as you help clients navigate the challenges ahead.