When small business owners provide health insurance to their employees through a self-insured plan, they run the risk of receiving catastrophic claims that could deplete their company’s savings. Stop loss insurance can protect companies from such a scenario by taking effect after an agreed upon threshold in claims has been exceeded.
Stop Loss is available in two forms: specific and aggregate. Specific stop loss provides protection for the employer against high claims on any one individual. Aggregate stop loss provides an upper threshold on the amount of eligible expenses that an employer would pay, in total, during the contract period.