Stop-loss insurance

Stop-loss insurance (pronounced: /ˈstɒpˌlɔːs ɪnˈʃʊərəns/) is a type of insurance that is designed to limit claim coverage (stop loss) to a specific dollar amount. This type of coverage ensures that catastrophic claims (specific stop-loss) or numerous claims (aggregate stop-loss), do not upset the financial reserves of a self-funded plan.

Etymology

The term "stop-loss" is derived from the insurance industry in the United States and refers to the insurer's limit of liability for claims. The term "insurance" comes from the Middle English word "ensurance," which means "to make sure."

Related Terms

Self-funded health care: A self-funded healthcare plan, also known as a self-insured plan, is one in which the employer assumes the financial risk for providing healthcare benefits to its employees.
Catastrophic health insurance: This is a type of medical coverage under the Affordable Care Act. This type of insurance is designed to provide an emergency safety net to protect you against unexpected major medical costs.
Aggregate stop-loss insurance: This type of insurance provides a maximum claim liability in the policy year for an entire group.
Specific stop-loss insurance: This type of insurance provides a specific maximum claim liability in the policy year for each individual member of the group.

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Stop-loss insurance