By Cyril Tuohy
Sun Life Financial has announced the launch of a stop-loss rider to protect U.S. self-insured employers against the cost of paying for catastrophically expensive cancer-related illness claims, the company has announced.
For employers to be eligible for the rider, they must have active stop-loss coverage with Sun Life and either the group insurance critical illness/cancer policy or the cancer-only policy in force with Sun Life, the company also said in a news release.
Stop-loss insurance is bought by employers who self-fund their employee benefit plans but who do not want to assume 100 percent of the liability for losses arising from the plans, according to the Self-Insurance Institute of America, which represents self-insured employers. Stop-loss covers only the employer, not the employee.
Employers typically self-fund benefit plans because it is cheaper for them than buying identical benefits coverage from a commercial insurance carrier. Under a stop-loss arrangement, the insurance company becomes liable for losses only when those losses exceed the deductible. As the name suggests a stop-loss policy is designed to “stop the losses” beyond the deductible.
Linking the employer cancer rider with group critical illness or cancer coverage is unique in the market, Sun Life also said.
"We are the only carrier who currently offers this benefit to employers while also providing a separate, optional cancer coverage for their employees,” Scott Beliveau, stop-loss vice president for Sun Life, said in a statement.
The cancer rider provides qualifying employers with a stop-loss deductible reduction of up to $10,000, when Sun Life reimburses an employer for a catastrophic cancer claim. Lump sum payments under the critical illness policies range from $5,000 to $50,000, the company said.
The average total out-of-pocket cancer costs for insured workers exceed $6,000, and as many as 25 percent of all of Sun Life’s stop-loss claims reimbursements are attributable to cancer, according to an analysis of Sun Life’s claims data.
Traditional radiation therapy treatment for cancer runs into the thousands of dollars, and more modern immunotherapy treatments can easily cost more than $100,000. In 2012 in the U.S. there were an estimated 1.63 million new cancer cases and 577,190 deaths, according to the American Cancer Society.
Cyril Tuohy is a writer based in Pennsylvania. He has covered the financial services industry for more than 15 years. He can be reached at Cyril.Tuohy@innfeedback.com.
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