- INSIGHTS
Your Stop-Loss Program Is Only as Good as the Person Running It
I spent the better part of a decade as a benefits consultant, handing employers renewal numbers I could not fully defend.
I would explain trend. Explain the pool. Explain that the market was moving. Sometimes that was true. Sometimes it was true enough. But there were renewals I walked into knowing, before I sat down, that the number had nothing to do with what that employer had actually done with their health plan. Their claims were good, multiple years running. The pool they were in was not. I had no real answer for that.
Here is what those years taught me. The report a carrier hands you at renewal and the program behind it are two different things. The report tells you what already happened. It takes a person, actively managing the pool every week, to change what happens next. That is why I built Virtue Health. Not because I saw a market opportunity. Because I watched good employers get punished for someone else’s choices for who’s managing their health plan, run by someone who was not watching it, and I could not fix that from inside the traditional model.
This year, for the first time, we published our own market report.
We pulled five of the most authoritative annual reports in employer health benefits: Amwins Benefits, Sun Life, Tokio Marine HCC, QBE North America, and PwC Health Research Institute. Not to summarize what each one said. To find what all five agreed on, across five independent datasets, with no shared agenda.
Here is what they agree on, and what it takes to actually do something with it.
The market already repriced catastrophic exposure. Most employers have not.
49% of self-funded plan sponsors reported at least one claim over $1 million in 2025. In 2024, that number was 23%. Stop-loss carriers already built that shift into their pricing. The employer sitting across from you at renewal has not built it into their strategy yet.
Claims above $2 million have risen 213% since 2020. That is not a bad stretch. That is the new baseline.
Anyone can read that number off a slide. It takes a program that reviews claims every week, not once a year at renewal, to do something with it before it becomes your number.
None of this is new. It has been sitting in carrier data for years. Here is the number nobody uses at renewal.
Children under age 10 account for 39% of all stop-loss claims exceeding $1 million. More than triple the share of any other age group. Most of the claims above $4 million trace back to this group too.
Here is the sentence you use when an employer asks how a plan with no major claims history got hit anyway: most of these claimants are neonatal, perinatal, or congenital. Medicine has gotten good enough to save children it could not save twenty years ago. No carrier can predict which family gets hit with a $1.37 million claim for a child under one year old, but carriers do not need to predict the case. They price stop-loss premiums assuming claims like this show up somewhere in the book every year, because the data says they will. The employer just never had the number broken out like this before.
Now you have the data to explain why that number showed up, instead of leaving the employer with a mystery you cannot answer.
But knowing the number does not catch the claim. Virtue Health pulls weekly trigger reports on high-dollar diagnosis codes, including NICU and neonatal admissions, and flags those claimants before they turn into a $1 million surprise at renewal. That is the actual mechanism behind the number, not a report somebody reads once a year. If nobody on your program is running that process every week, this data is just a story you tell after the fact.
Cancer is still the dominant driver, and every source in the report confirms it.
35 to 36% of all stop-loss reimbursements trace back to malignant neoplasms. Claim frequency at the $200,000 deductible level climbed nearly 30% in a single year. PwC’s actuaries name new oncology drug launches as one of the hardest cost variables to forecast, and one of the main reasons their 2026 group medical trend sits at 8.5% and keeps getting revised upward.
Sun Life puts the average blood cancer claim, at the multimillion dollar level, at $5.45 million in 2025.
That number belongs in front of whoever is running your program every week, not just at renewal. A claim like that does not go from diagnosis to $5 million overnight. It gives you months to intervene, if someone is actually watching.
Pharmacy stopped being a line item. It is a stop-loss problem now.
PwC has the gap quantified: pharmacy trend is running 2.5 percentage points above medical trend, projected to hit 11% in 2026. Specialty drugs are less than 2% of prescriptions and roughly half of all drug spend.
If pharmacy data, medical claims, vendor alignment, and cost containment are not working together inside a self-funded plan, the renewal will make that visible eventually. Usually at the worst possible time, in front of a CFO who is already frustrated.
I have sat in that room without an answer. It is why Virtue Health has required an integrated pharmacy strategy, an independent TPA, and carved out specialty medications as minimum cost containment requirements since day one. Not features we added when the market got hard. The foundation the program was built on, and the reason it has to be run by people who are actually looking, not just administering.
The market is tightening, and it is not finished.
Stop-loss carrier loss ratios hit an eight-year high in 2024. BUCA carriers reported 90.5%. Tokio Marine HCC’s CEO has said publicly that tightening continues through 2027.
The best risks are still competitive. The undisciplined groups are hitting rate caps. That gap is widening every renewal season, and it has nothing to do with which report an employer read. It has to do with whether the people running their program spent the year managing claims, or just processing them.
The benefits consultants who know which side of that split their employers are on before renewal walk into the room with a plan instead of an explanation.
Why we built this report.
I did not build Virtue Health to sell a product. I built it after watching employers absorb renewal increases that had nothing to do with their own performance, and believing the problem was fixable if the program was built correctly, and run correctly, from the start.
The data in this report is the easy part. Any carrier can hand you the same numbers. What separates a program that protects an employer from one that just processes their claims is whether somebody is reading this data every week and acting on it, not once a year when the renewal shows up.
This is the first report we have published under our own name. It will not be the last. Every number in it is sourced and cited, drawn from five organizations with no stake in each other’s conclusions. What they agree on is the most useful thing a self-funded employer, or the benefits consultant sitting across from them, can read going into the second half of 2026.
Your stop-loss program is only as good as the person running it. This report tells you what the market already knows. Now you have the data to tell that story to the employer yourself, before the renewal tells it for you.
The full report is available now. 15 pages. A single-page Top 10 Takeaways leave-behind is included.
John W. Sbrocco
@johnwsbrocco
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