Million Dollar Claims Increasing Among Employer Plans

Million dollar claims per million covered employees rose 15% in the past year and 45% over the past four years, according to a new report from Sun Life. And one-fifth of employers had at least one member with more than $1 million in claims from 2018 through 2021.

For self-funded employers, average cost is a good starting point to plan for risk management because it’s reflective of the costs that will likely be seen for a stop-loss claim related to a condition, the report found. But an employer could see a wide range of costs given the comorbidities that might exist, or the complications that could occur.

Stop-loss is a form of excess risk coverage that provides protection for the employer against a high claim on any one individual.

Even conditions with a low average cost, such as behavioral health and orthopedic issues, can reach over $1 million. For instance, in 2022, orthopedics had an average cost of $90,000, but one severe case uncovered in the data reached more than $4.5 million.


Among other insights, the report also found that 71% of all stop-loss claims came from the top 10 conditions unearthed by the data: malignant neoplasm, leukemia, lymphoma, multiple myeloma, cardiovascular disease, orthopedics, newborn and infant care, respiratory, sepsis, neurological, gastrointestinal, and urinary conditions.

While cancer continues to be the largest driver of high-cost claims, cardiovascular disease rose one spot to the number two claim condition in 2022, with $142.4 million in reimbursements over about 2,300 members. In the top spot once more was malignant neoplasm,with $324.8 million in reimbursements.

Rounding out the top three is leukemia, lymphoma and multiple myeloma. Combined with malignant neoplasm, these two cancer categories made up 29% of total claim reimbursements over the past four years, including both medical and drug spend. More than a third of total claim reimbursements can be attributed to the top three conditions.

COVID-19, which appeared on the list for the first time in 2020, fell from number eight in 2021 to number 11 last year, though authors noted it continues to impact other medical conditions.

About 11% of employers experienced a birth-related stop-loss claim in the four-year benefit period from 2018 through 2021, data showed. Newborn/infant care ranks at number five this year, consistent with its previous ranking in the top 5 last year, and has one of the highest average costs at almost $328,000.

Looking at drugs, 11 of the top 20 high-cost injectable drugs are related to the treatment of cancer. Rylaze, the cancer drug with the highest average cost(over $808,000), is new to the top 20 injectable drugs in 2022.


Employers of all sizes are looking to bolster their health benefit options in 2023 with an eye toward improving recruitment and retention, and will focus on affordability and access, according to a July Mercer survey.

More than two-thirds of the 700 respondents said they are looking to enhance their health and benefit offerings this year. In all, 61% of participating U.S. employers are conducting surveys on employee benefit preferences.

Meanwhile, average costs for U.S. employers that pay for their employees’ healthcare will increase 6.5% to more than $13,800 per employee in 2023, largely due to economic inflation pressures, professional services firm Aon said in August.

This projection is more than double the 3% increase to healthcare budgets that employers experienced from 2021 to 2022. But it’s significantly below the 9.1% inflation figure reported through the Consumer Price Index.

On average, the budgeted healthcare costs for clients are $13,020 per employee in 2022. The analysis uses the firm’s Health Value Initiative database, which captures information for nearly 700 U.S. employers representing about 5.6 million employees.


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