If your organization sponsors a self-funded health plan, you will want to pay close attention to your next stop-loss renewal.
We recently went through Tokio Marine HCC’s 2026 Annual Stop-Loss Report, and there is plenty in it that CFOs, CEOs, and finance leaders should know before they sit down at the renewal table.
Here are the three things that stood out to us, along with what we think you should do about each one.
Large claims are becoming more common
The report shows claims exceeding $2 million are up 213% since 2020, and claims over $500,000 are up 114% over that same period. The biggest jump happened between 2024 and 2025.
Last year’s claims experience is not a reliable guide for what to expect this year. Before renewal season arrives, it is worth modeling your exposure at a few different deductible levels so you are not caught off guard.
This is exactly the kind of work we help employers with. Tracking claims data across plan years and modeling different deductible scenarios can feel hard to manage on your own, so we work alongside our clients to keep that data organized and easy to act on.
Even the insurance carriers were surprised
According to the report, the January 2025 stop-loss trend came in 9.2 points above the five-year average, compared to just 5.0 points above average in January 2024. Underwriters have responded with tighter terms and firmer pricing.
This is likely to be a firmer market for the next couple of years, at least through 2027. Rather than waiting to see if things ease up, it makes sense to plan around a harder market now.
One thing that can genuinely help here is timing. Bringing 9 to 10 months (or more) of current-year claims data to your renewal gives underwriters something solid to work with. When there is less data than that, underwriters tend to price more conservatively simply because they have less information to go on.
Your specific deductible may be your best lever
Half of employers did not raise their specific deductible even once over four renewal cycles. Meanwhile, employers who raised their deductible regularly saw noticeably smaller average annual increases.
A good rule of thumb is to raise your specific deductible by at least the first-dollar trend each year. If you do not, leveraged trend will effectively do it for you, and not in your favor. For example, 10% medical inflation can turn into something closer to 25% trend once it works its way through the stop-loss layer.
The Bigger Picture
The employers who come out ahead over the next several years will not necessarily be the ones who found the cheapest quote this cycle. They will be the ones who treated their plan as a multi-year strategy rather than a once-a-year negotiation.
If your renewal is coming up and you would like a second set of eyes on your strategy, we are happy to help. DM me for more information, and we can walk through what this report means for your specific plan.