Specific Stop-Loss Insurance
What Does Specific Stop-Loss Insurance Mean?
Specific stop-loss insurance is a type of coverage that protects self-insured employers or policyholders from large health insurance claims made by individual employees. Unlike aggregate stop-loss insurance, which covers total expenses over a contract period, specific stop-loss insurance activates only when a claim exceeds a predetermined threshold specified in the policy. This coverage is also referred to as individual stop-loss insurance.
Insuranceopedia Explains Specific Stop-Loss Insurance
A specific stop-loss insurance policy acts as a reimbursement mechanism for employers when a claim from an individual employee exceeds a predetermined cost threshold. It does not provide coverage for employees directly. For example, if an employer purchases a self-funded medical plan with a threshold of $100,000 and a participating employee incurs medical expenses exceeding that amount in a single claim, the employer’s specific stop-loss coverage will activate and reimburse them for the costs beyond the threshold.
