Stop-Loss Provision

What Does Stop-Loss Provision Mean?

A stop-loss provision is a clause in a health insurance policy with a deductible and co-insurance arrangement that stipulates the insured will no longer be required to pay a percentage of medical expenses once their out-of-pocket costs reach a specified limit. Without this provision, the insured would continue to share in their medical expenses indefinitely.

Insuranceopedia Explains Stop-Loss Provision

A health insurance policy with a co-insurance provision requires the insured to share in the costs of medical expenses after paying the deductible. However, a stop-loss provision places a cap on these out-of-pocket expenses. It specifies the amount beyond which the insurance company will cover 100% of the medical costs. For example, in a policy with a $4,000 stop-loss provision, the insured no longer has to pay their co-insurance percentage once they have paid $4,000 in out-of-pocket expenses.