Glossary

Glossary

A
Aggregate Advancement		Optional Stop-Loss protection against monthly claims fluctuations. The Stop-Loss carrier "lends" the Plan amounts in excess of the monthly aggregate amount. This is designed to level the cash flow for the Plan.

Aggregate Attachment Point		Under the aggregate Stop-Loss insurance, this is the point at which the Stop-Loss carrier begins to reimburse the employer.

Aggregate Stop-Loss Coverage		Stop-Loss insurance that protects the Plan on an annual basis against overall annual claims liability during the contract year.


C
Coordination of Benefits (COB)		Coordination between parties who may also have liability on a claim.


E
Expected Claims		The dollar amount, which represents the anticipated claims of a self funded medical plan for the plan year.


F
Fixed Costs		The "set" amount payable for the self-funded plan. The amount includes, but is not limited to, administration costs and Stop-Loss premiums. Claims liability is not considered a fixed cost.


M
Margin		The claims liability between expected claims and the aggregate attachment point.


R
Reserve (IBNR)		Amount established to cover run-out claims. This amount can also be used to offset future rate increases.

Run-In		These are claims incurred prior to the effective date, but presented for payment after the termination date.


S
Specific Stop-Loss Coverage		Stop-Loss insurance that protects the Plan against individual catastrophic loss above a predetermined amount.

Stop-Loss Coverage		A form of insurance that reimburses self-funded employers for losses in excess of a predetermined amount.


T
Terminal Liability (Run-Out)		Optional insurance that covers claims presented and paid after the termination date of the StopLoss contract to a predetermined timeframe and dollar limit.

Third Party Administrator		TPA's are hired by the employer to administer and manage the self-funded plan (i.e. claims payment, eligibility).