Are Laser Deductibles Good or Bad?

As a decision-maker steering your company's health insurance strategy, you've likely encountered the term "laser deductible" in discussions with brokers. It's not uncommon for them to advise steering clear of laser deductibles due to the perceived additional liability they bring. But is that always the case? Let's break it down and explore why it might not be the villain it's often made out to be.

First things first, what is a laser deductible? In essence, it's a component that puts additional responsibility on the employer for an individual plan member with a persistent health condition.

This condition is assumed to lead to high claim activity in the upcoming plan year. No wonder brokers sometimes advocate for "no-laser" stop-loss contracts to avoid this potential headache.

Brokers often paint laser deductibles in a negative light, emphasizing the added liability for employers. However, laser deductibles aren't inherently bad. It all depends how well your executive team evaluates the associated risks.

Consider this: before hastily dismissing a laser deductible, look closer at the potential liability versus the extra premium required for a "no-laser" contract. It's a delicate balance that requires thoughtful consideration.

Assess the individual plan member's current situation – are they a long-term risk, or is there a light at the end of the health condition tunnel (maybe retirement)?

Here are a few points to ponder:

Evaluate Risk versus Reward

Every decision involves a trade-off. When it comes to laser deductibles, weigh the potential liability against the additional premium needed for a "no-laser" contract. Sometimes, taking on more responsibility might be the cost-effective choice.

Individual Plan Member's Situation

Not all health conditions are created equal. If the plan member's situation suggests a short-term challenge – perhaps they're on the brink of retirement – taking on the added liability might be a strategic move. It's like weathering a temporary storm instead of abandoning a ship.

Zoom out and look at the bigger picture. Does your company have a history of attracting and retaining long-term employees? If so, the calculus changes. A temporary spike in liability might be a blip on the radar compared to your workforce's overall stability and loyalty.

Communication Is Key

Once you've made a decision, communication is paramount. Be transparent with your team about the choices made. A well-informed crew is more likely to weather any storm that comes their way.

Laser deductibles aren't the monsters they're sometimes made out to be; they're just one element in the ocean of health insurance choices. Assess the risks, consider the rewards, and move confidently toward a decision that aligns with your company's unique needs.

Need help navigating the vastness of health insurance choices? Engage in open and honest discussions with your broker. A good broker should act as your co-pilot, guiding you through the intricacies and helping you make informed decisions aligned with your company's goals.