Why Does Self Fund Health Require Aggregate Accommodation?

Short answer: Aggregate Accommodation (AA) ensures we can keep you “funded to the max” operationally—so claims are paid on time, cash deals can be executed quickly, and you’re never asked to deposit more than your max mid-year when pro-rated aggregate factors are briefly exceeded.

What AA is (in this context)

An aggregate accommodation lets the stop-loss carrier advance funds during the year if your paid claims exceed the pro-rated aggregate attachment at a point in time. It’s reconciled later, so year-end aggregate claims are still what ultimately count—but AA bridges timing risk during the year.

Why SFH requires AA

  1. Operational simplicity: “Your max is your max.”

    We level-fund so employers don’t ride the volatility of weekly claim pulls. Without AA, if mid-year paid claims clear the pro-rated agg point, we’d have to ask you to fund above the max—then unwind later. AA avoids that inconsistent cash ask.

  2. Timely payment protects discounts.

    Some systems (e.g., UW Health) strictly enforce 30-day payment windows. If a plan is over the pro-rated agg and we don’t have AA, delaying payment can void network discounts and trigger downstream issues with stop-loss. AA ensures we can pay on time.

  3. Cash-on-demand enables savings.

    Our strategy often pays providers at time of service (e.g., virtual credit card) to secure steep, pre-negotiated prices (single-case agreements, bundles, cash rates). AA keeps sufficient cash available in the FBO account so we can execute those opportunities within 3–5 days.

  4. Prevents cascading admin problems.

    Without AA, shortfalls can snowball: delayed payments → discount reversals → stop-loss questions on timeliness → more admin friction. AA breaks that chain.

“But almost no one hits the annual aggregate…so why buy AA?”

True: very few groups finish the year collecting on the annual agg. The issue we’re solving isn’t end-of-year math; it’s the mid-year timing reality where a group can be “over pro-rated agg” before specific reimbursements land or before the annual picture normalizes. AA exists to bridge that temporary gap so we don’t violate discounts, slow claims, or ask you to exceed the max.

How reimbursements work with AA

  • Requested and reconciled by Yuzu.

    Yuzu manages AA requests when thresholds are met.

  • Calculated net of specific.

    AA is based on net aggregate liability after accounting for specific reimbursements, to avoid double dipping.

  • You may see advances repaid later.

    If the year finishes under the final agg attachment, advances reconciled earlier are trued up at policy end—exactly as intended.

Cost perspective

AA typically adds a small fixed premium relative to the risk it removes (lost discounts, emergency cash calls above max, operational churn). In our model—where speed and timely payment are core to savings—it’s a high-leverage safeguard.

Bottom line

We require aggregate accommodation to:

  • Keep employer funding predictable (no mid-year asks above max),
  • Preserve contracted discounts via timely payments,
  • Maintain cash agility to execute real-time savings, and
  • Prevent operational and stop-loss complications that undermine plan performance.