Stop-Loss Insurance

Protect Your Company from Unforseen Expenses with Stop-Loss Insurance

Self-funding helps you save money and better understand your health care costs by paying on a per-claim basis. However, what happens when one of your employees has a catastrophic claim. This is where Stop-Loss Insurance comes in. With Stop-Loss Insurance, you pay an annual premium to help cover these catastrophic costs. This insurance places a cap on your regular self-funding plan and covers anything above that plan.

The types of stop-loss insurance

  • Specific stop-loss insurance: Protects your self-funding plan against an individual catastrophic claim
  • Aggregate stop-loss insurance:  Covers claims that exceed a given amount for the entire covered group.

How stop-loss insurance works

  • If your limit for specific stop-loss is $50,000 (per member per year) and one member incurs claims of $75,000, the plan’s liability would be limited to $50,000 and the stop-loss carrier would reimburse the remaining $25,000.
  • When an entire covered group has expected claims of $500,000 per plan year, reimbursement by the stop-loss carrier would normally take place if actual claims exceed 125% of the expected claims, or $625,000 overall.
  • The $625,000 amount is referred to as your attachment point, or the amount above which the carrier has liability.
  • The cost of a self-funded plan is the total of fixed costs (e.g., administrative expenses, stop-loss premiums, etc.) and the claims paid by the plan less stop-loss reimbursements.

At Markham Gray & Dennis, we have helped countless individuals secure the stop-loss insurance that’s right for them by leveraging our industry leading experience, established provider relationships and unmatched expertise. We will expertly review your company’s information and self-funding plan and recommend the stop-loss coverage that fits your company’s needs. To make stop-loss insurance part of your company’s benefit program, contact us today.