Specific Stop-Loss Insurance

What Does Specific Stop-Loss Insurance Mean?

Specific stop-loss insurance is a type of additional coverage that provides protection to self-insured employers or policyholders against a large health insurance claim from an individual employee. As opposed to aggregate stop-loss insurance, it does not apply to eligible expenses over a contract. Basically, it goes into effect once a claim goes beyond a specific threshold as stipulated in the stop-loss insurance policy.

It may also be known as individual stop-loss insurance.

Insuranceopedia Explains Specific Stop-Loss Insurance

Specific stop-loss insurance policy serves as a reimbursement mechanism for a claim from one employee that exceeds the predetermined level of cost for employers and companies alike. It does not insure employees. Thus, when an employer purchases a self-funded medical plan with a threshold of $100,000 and a participating employee incurs more than the threshold amount in a single medical expense claim, then the employer’s specific stop-loss coverage kicks in and reimburses them in excess of the threshold amount incurred.