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What is stop-loss insurance AND how does it work?
By Staff Reporters
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A stop-loss health insurance policy covers claims above a health insurance plan’s retained claims. The claims fund of a self-funded employer will pay claims up to the predetermined deductible for each of the company’s covered employees. The role of the stop-loss is to cover all claims above these deductible levels.
CITATION: https://www.r2library.com/Resource/Title/0826102549
According to RoundStone Insurance, aggregate stop-loss insurance is designed to protect an employer who self-funds their employee health plan from higher-than-anticipated payouts for claims. Stop-loss insurance is similar to high-deductible insurance, and the employer remains responsible for claims below the deductible amount.
An individual stop-loss insurance carrier determines the average expected monthly claims per employee / per month PEPM based on the employer’s history. Then, this figure is multiplied by a percentage ranging from 110%-150%. That determined amount is then multiplied by the enrollment on a monthly basis to establish the aggregate deductible.
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Filed under: "Ask-an-Advisor", Glossary Terms, Health Economics, Health Insurance, Risk Management | Tagged: aggregate stop-loss insurance, Health Insurance, individual stop-loss insurance, PEPM, Risk Management, stop loss insurance |
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