Result Driven Impact

Deductible Reimbursement

Backstory

Gary owns and operates a healthcare practice in the Midwest U.S. and implemented an 831(b) Plan administered by SRA. Gary designed his plan to fit his business needs and to address the risks he was most concerned with, including the high deductibles he elected on his traditional insurance policies. Gary contributed to his 831(b) Plan for two years without incident until he received a call from his local police about a break-in at his practice

  • INDUSTRY- Healthcare
  • ANNUAL GROSS REVENUE- $3.5 MILLION

DEDUCTIBLE REIMBURSEMENT

The insurance market continues to harden as rates increase and carriers seek to minimize their risk exposures. This hardening puts the consumer at a disadvantage as their rates might increase despite good claims history, and filing claims might result in non-renewal. To manage rate increases and avoid non-renewal, some business owners elect to increase their deductibles and accept a larger portion of the first-dollar risk on their insured losses. Electing a high deductible leaves the business exposed to cash flow interruptions as claims occur and fall under the deductible.

Incident

Following the break-in at his practice, Gary filed a property claim with his insurance carrier. His carrier adjudicated the claim, and a claim payment was made; however, the bulk of the loss fell under Gary’s deductible amount. Gary was left to pay for the bulk of the repairs to his property that was damaged during the break-in, as well as replacement of stolen property.

Resolution

Gary filed a deductible reimbursement claim to his 831(b) plan’s direct writer. The direct writer began its claims adjusting process to determine coverage. Upon review, the direct writer determined that its deductible reimbursement policy provided coverage for the deductible amount of his property claim.

Once coverage was determined, the direct writer requested additional documentation from Gary to confirm the total deductible amount. The direct writer made a claim payment to Gary’s business to reimburse the total deductible realized on his property claim.

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