Stop-loss insurance, in combination with a self-funded group health plan, is a type of coverage that protects companies from catastrophic or unexpected medical claims.
Why choose a plan with stop-loss coverage?
Protecting a company financially is critical and stop-loss is an employer’s safety net. With the Self-Funded Program, , stop-loss insurance is always included in employers’ monthly payments. This protects the employer against higher-than-expected claims. With level-funding, employers will never have to pay more than the amount, agreed upon up front, that they are responsible for funding the claims account each year.
By choosing a self-funded plan with stop-loss coverage, employers limit their risk, protect themselves against high claims, and have the potential for great savings. In some instances, they may even receive a refund in years claims are lower than anticipated.1
Stop-loss in action
When claims exceed the amount set when the plan was issued, stop-loss advances money to an employer claims account to cover the excess costs.
Stop-loss plans offer specific and aggregate deductibles.
The specific deductible is the amount set for each individual on the plan. When an individual has covered charges that exceed the specific deductible, the stop-loss coverage kicks in for that individual’s claims.
The aggregate deductible is the maximum amount the employer will pay for covered charges, regardless of if any specific deductibles are met. Once the plan hits the aggregate deductible, the stop-loss coverage kicks in for covered charges under the plan for the remainder of the year.
Mid-market group options
We understand that with more group members comes the need for more options to customize plan designs.
Mid-market groups have multiple stop-loss options. Aggregate Only Stop-Loss is coverage with a single stop-loss deductible to meet for the entire group.2
Aggregate deductibles for Aggregate Only Stop-Loss coverage are based on a percentage of the total expected claims, calculated based on the census of the group and other factors. Once the health plan hits the aggregate deductible, the stop-loss coverage kicks in for covered charges incurred for the rest of the plan year.
Aggregate Only Stop-Loss does not protect against an individual’s claims on the plan and instead protects only against higher-than-expected total claims. This allows the employer to take on a little extra risk, and increase potential savings. Specific Only Stop-Loss is also available for traditional funded groups and provides protection solely against an individual’s claims on the plan.
Learn how stop-loss insurance can benefit you! Call your Total Benefit Solutions, Inc. Group-Health experts at (215)355-2121.
1 In years when claims are lower than expected, a portion (or all, depending on the plan selection) of the difference between the group’s anticipated and actual claims is credited back to the employer. Refund is subject to any Terminal Liability Coverage fee.
2 Aggregate Only Stop-Loss is also available for groups with under 50 employees in the following states: Maryland, New Jersey, and West Virginia. Available in Maine for groups of 11 or more employees.