What exactly is a Gibraltar plan?

It must provide evergreen long-term protection for specific stop-loss that caps the annual increase (in writing or historical practice) at 35% or less without a laser on renewal (see below). While any stop-loss carrier could offer this, it is most likely that it will be tied to a sizeable pool of clients that effectively protect each other from catastrophic renewals—with or without an insurance captive.

Carrier may not impose a laser on renewal but the client can request one as part of a fee negotiation. Carrier may impose a laser  for a new client at the start of coverage but it may not impose a laser for conditions from those that were added to the plan after the beginning of the plan contract or were covered at the start of the coverage but were undisclosed during the underwriting process and were less than $25,000 during the 12 months prior to binding of coverage—unless it can be shown that the client knowingly withheld material information. (This gives some leeway for potentially large claimants that should have been disclosed but were not at the time of the application.)

“Paid” contracts too often ignore the potential problem of the run-out should the plan cancel due to converting to a fully insured plan, cancellation of the plan, purchase of the employer, etc. The standard protection for this, called Terminal Liability Option (TLO), generally provides three months of run-out but depending on the carrier it might need to be purchased at the renewal just prior to the event (which of course is a problem for events that occur unexpectedly). Some carriers will allow the plan to purchase the TLO at any time needed but the TLO will only be available if the plan ends on renewal, which might not be practical. For a Gibraltar plan, the TLO must generally be available for purchase at any time. However, if the TLO requires the event to take place at renewal and that is clearly spelled out in the contract and the client signs off on that, that would be acceptable.

Reference Based Pricing payment models often promise to the stop-loss carrier a cap on facility (and even physician) such as 140-200% of Medicare allowable fees.  For such an agreement, the stop-loss carrier offers a rate reduction.  The problem arises if the plan ends up settling with a recalcitrant medical provider for a higher fee. In a Gibraltar plan the stop-loss carrier will either (1) absorb the negotiated payment with no rate impact (2) offer to pay for the higher amount if the client pays back the discount offered or (3) the client signs a document up front acknowledging the risk it is taking if the stop-loss carrier caps its payment at, in the above example, 200% of Medicare allowable fees.

If the stop-loss contract excludes medical care received outside of the United States except in an emergency, the client must sign off at time of purchase that it is aware of this restriction.

For incurred contracts, the plan must extend coverage to include appeals awarded by an IRO back to the plan year the claim was incurred. For paid contracts where a plan is terminated and a terminal liability option (TLO) is in place, the TLO must include the IRO award.

The definitions of “experimental” or “investigational” must be defined ultimately by the plan and not the stop-loss carrier, to avoid possible gaps. The same applies to UCR payment levels.

The stop-loss carrier must make it clear in writing how it will handle large hospital claims in New York state if the client’s plan is not signed up as being part of the New York state fund. The Gibraltar plan will include other state surcharges as covered expenses as well.