Stop Loss Coverage

Stop-Loss Insurance

Employers can choose their level of risk
through the selection of the type of coverage and contract

What is Stop-loss Insurance?

The employer purchases stop-loss insurance to protect the Plan from catastrophic losses associated with large dollar claims. The following are the two types of stop-loss coverage:

Specific Stop-Loss

Specific or individual stop-loss insurance protects the employer against large, individual catastrophic claims incurred under the self-funded benefit plan.

Aggregate Stop-Loss

Aggregate stop-loss coverage is an umbrella type policy, which protects the plan from catastrophic losses that come from the employer group as a whole.

What types of stop-loss contracts are available?

Stop-loss contracts are purchased to indemnify the employer for claims over a predetermined dollar amount during a time period. The following are definitions of some of the contracts available.

The first number denotes when the claim was incurred; the second number denotes when the claim was paid.

Contract Type

12/12
For claims to be considered eligible (reimbursable) under the stop-loss contract, they must be incurred and paid within the
12-month policy year.

12/15
For claims to be considered eligible (reimbursable) under the stop-loss contract, they must be incurred within the policy year and paid within the policy year plus an extension of 3 months past the end of the policy year.

15/12
For claims to be considered eligible (reimbursable) under the stop-loss contract, they must be incurred within the three months prior to the policy year and paid within the 12-month policy year.

Paid
For claims to be considered eligible (reimbursable), the claims must be paid during the agreement period, without run-in limitations, provided the claim was incurred no earlier than the original effective date of the self-funded plan.

Re-Insurance

Coordination with Stop-Loss Carriers

Our internal systems allow us to coordinate with re-insurers on a real-time basis and provide them with timely information regarding diagnosis and expected future claims. Making this information readily available is critical in evaluating stop-loss bids, and specific and aggregate thresholds.

Multiple Stop-Loss Carriers

If needed, CNIC's marketing department will research the market for the stop-loss carrier that best meets the needs of the client.

Contract Type

12/12		For claims to be considered eligible (reimbursable) under the stop-loss contract, they must be incurred and paid within the 12-month policy year.

12/15		For claims to be considered eligible (reimbursable) under the stop-loss contract, they must be incurred within the policy year and paid within the policy year plus an extension of 3 months past the end of the policy year.

15/12		For claims to be considered eligible (reimbursable) under the stop-loss contract, they must be incurred within the three months prior to the policy year and paid within the 12-month policy year.

Paid		For claims to be considered eligible (reimbursable), the claims must be paid during the agreement period, without run-in limitations, provided the claim was incurred no earlier than the original effective date of the self-funded plan.