All of us have experienced the terms “mitigating” and “managing” used interchangeably with respects to claims. For the purpose of this article and from an insurance perspective, in my opinion, the two have very different meanings. Mitigating applies to before the occurrence of a claim, while managing is after. Therefore, the best practice is to have a plan for potential claims before the event occurs.
That said, insurance is intended to protect us from fortuitous events, therefore as consumers we are initially conditioned to manage an accident’s outcome after the fact, rather than implement strategies to mitigate, if not avoid, exposures and costs.
Why is the distinction between mitigating and managing important, especially if the policyholder is ceding the excess claim cost (deductible, specific, self-insured retention) to another party? Regardless of individual claim deductible, the loss dollars follow the employer’s claim loss experience, which is used by underwriting to evaluate and price the risk.
Policyholders have become more sophisticated in recent years and have implemented mitigation strategies as part of their claims practice. Further, these policyholders understand the value of aligning with the proper partnerships and the benefit of investing into pro-active strategies for better claims outcomes.
What are your exposures? Do you have a mitigation plan? Have you had recent changes with your claims practices and/or partnerships?
Whether you already have or need a risk management strategy for your self-funded medical benefits plan, USBenefits welcomes the opportunity explore how we may be able to enhance your medical stop loss claim strategies and possibly lower your premium.