Industry Story: Surge in Stop-Loss Premiums, What Employers Are Doing

What’s happening

According to Segal’s 2025 National Medical Stop-Loss dataset, average stop-loss premiums jumped ~9.7% year over year among health plans that kept the same specific stop-loss coverage levels. SegalEven for groups that increased deductibles or adjusted policy parameters (which tend to reduce premium increases), the increase still averaged about 7.3%.

The driving forces behind this uptick include:

• More frequent and more severe high-cost claims (especially specialty drug therapies) that push self-funded plans into stop-loss territory.

• Inflationary pressure on medical services and provider charges, which are rising faster than many employers expected.

• The gap between what plans cover vs. what pathology, pharmacy, or hospital practices are billing continues to grow, making the negotiation, review, and utilization strategies more important than ever.

How employers are responding

In response to these increases, employers and plan sponsors are taking more proactive cost containment steps, including:

• Re-evaluating stop-loss cover levels and deductibles. Some are opting to accept higher deductibles to lower premium costs.

• Strengthening utilization management and claims integrity – pushing earlier interventions to reduce downstream high-cost events.

• Exploring plan design changes: renegotiating specialty drug contracts, carving out or shifting certain benefits (medical vs pharmacy), tightening vendor oversight, and optimizing site-of-care.

• Considering alternative risk models such as captives, or grouping together portfolio strategies to smooth cost volatility. One case study (ArtexRisk) showed a mid-sized employer joined a medical stop-loss group captive, and realized better predictability in renewals and improved financial outcomes.

Key Numbers

• Stop-loss premiums now increasing ~ 9.7% on average (unchanged benefit levels). Segal

• Even with benefit changes / higher deductibles, many employers are seeing ~7.3% increases.

• Medical cost trend is projected to be elevated for 2026 as well; many employers estimate cost growth would be ~9%+ if no containment actions are taken.

In the face of nearly 10% stop-loss premium increases, many employer groups are asking: what can we do before those premiums bite? At Actuate Insights we help you build defensible cost containment strategies — from bill-review to specialty drug oversight, from risk file laser strategies to vendor governance — so that your renewal isn’t dictated by rising premiums but shaped by proactive savings you can measure and audit.

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