The Perfect Storm: Why Stop Loss Renewal Rates Are Rising

Stop loss insurance renewal rates have taken a steep increase this year. In many cases, the average is coming in at 10-20%.

In contrast, OneVeracity clients are seeing stop loss rates increase by just 1.5%, even as the broader market rates soar to unsustainable heights.

Understanding the factors that drive stop loss rates upward – and what OneVeracity is doing to combat them – is essential for any self-funded employer trying to protect their health plan's long-term stability.

How stop loss rate increases add up

Fewer carriers in the market

One of the biggest drivers behind rising rates is simple: there are fewer carriers left to compete for business.

Multiple major stop loss carriers have exited the market in recent years. With fewer options available, employers have less leverage at renewal, and the remaining carriers have grown more selective. To account for thinning competition, carriers raise rates to manage their own risk.

Shifting Affordable Care Act enrollment dynamics

Recent changes to subsidies for health plans from the Affordable Care Act (ACA) have quietly reshaped where people get their coverage.

Healthier individuals are more likely to stay enrolled in ACA plans, while those with greater healthcare needs increasingly return to employer-sponsored coverage. This shifts higher-cost risk back onto employer health plans, which stop loss carriers then have to price for.

Rising claims costs

From specialty drugs to high-cost claimants, increasingly high healthcare spend is becoming the norm – not the exception.

As large claims rise in frequency and severity, stop loss carriers raise rates just to keep up.

Increasing administrative costs

Claims costs are not the only expense increasing in the stop loss market.

Managing General Underwriters (MGUs), carriers, and stop loss administrators are facing significant increases in operating expenses. Core underwriting platforms, data systems, compliance requirements, technology infrastructure, and specialized staffing costs have all become more expensive. In some cases, the costs of widely used underwriting and policy administration platforms have increased by 20% to 30% or more.

These administrative expenses ultimately become part of overall pricing. Even when claims performance remains stable, rising operational costs can contribute to higher stop loss renewal rates.

The OneVeracity approach to risk management

Stop loss coverage protects employers from catastrophic claims. But in the current market, that protection itself is getting more difficult to afford.

Self-funded employers need coverage that reduces their financial risk. At the same time, many can't simply absorb the increasing rates from their carrier year after year.

The sustainable solution is to adopt a proactive approach to managing stop loss rates.

Why OneVeracity clients are seeing 1.5% increases

OneVeracity manages the factors that drive increased renewal rates long before the policy renewal conversation starts. Our approach has proven to be effective – this year, when others are facing 20% higher rate renewals, OneVeracity clients are seeing stop loss renewal increases of just 1.5% on average.

Proactive pharmacy management

Pharmacy costs, including specialty drugs, are some of the largest drivers of catastrophic claims. VeracityRx, our pharmacy solution, identifies opportunities to control pharmacy spending such as targeted network steering, proactive plan management, and personal importation.

By improving employers' pharmacy management, VeracityRx helps reduce one of the major factors driving stop loss increases.

Early intervention and member care

Better health outcomes for members often translate to more stable and predictable claims for their employer. OneVeracity believes that early intervention and care management support are crucial to create the best outcomes.

From timely pre-certifications to dedicated clinical guidance from nurses, the programs in OneVeracity's Care Solutions are designed to help support members with chronic conditions and high-risk profiles. By improving outcomes for the highest-risk individuals, Care Solutions works to reduce claim volatility in the long run.

Strategic management of high-cost claimants

OneVeracity continuously reviews claimant risk factors to identify opportunities to mitigate an employer's financial exposure.

We carefully analyze contract terms, carrier requirements, and other risk factors to ensure plans are structured for long-term success.

Planning beyond the next renewal period

Most stop loss insurance advisors plan one year ahead. OneVeracity plans for four.

Many stop loss decisions are made annually: secure the best renewal rate this year, then do the same thing the next. This reactive approach might work during good years, but leaves employers exposed the moment the market takes a turn.

Our multi-year view means we take a different approach by addressing the root causes of high renewal rates. We believe in avoiding short-term decisions that ultimately create bigger problems at the next renewal (or the one after that).

Our goal is to create a sustainable risk strategy that is effective through both good and bad years.

Results that speak for themselves

20% vs. 1.5%. This is a meaningful difference between this year's average stop loss renewal increase and the average increase OneVeracity clients experience.

Real, measurable results like these are why OneVeracity has a 97% client retention rate for stop loss. Our clients stay because they see consistent value – in their finances, in their member outcomes, and in our partnership.

Even in changing market conditions, OneVeracity delivers results through better planning and an undivided focus on bringing value for the long-term.

The bottom line

In today's changing stop loss market, traditional annual renewal negotiations aren't enough to guarantee plan sustainability. Employers need a strategic partner – one focused on pharmacy management, holistic care solutions, thoughtful risk mitigation, and long-term planning.

While many organizations receive double-digit rate increases, OneVeracity clients are experiencing measurably greater stability. This is the real outcome of our approach to healthcare.

Learn more about how OneVeracity helps self-funded employers build stability into their stop loss strategy, even in an unstable market.