Connect with us

Hi, what are you looking for?

THE BIZNOB – Global Business & Financial News – A Business Journal – Focus On Business Leaders, Technology – Enterpeneurship – Finance – Economy – Politics & LifestyleTHE BIZNOB – Global Business & Financial News – A Business Journal – Focus On Business Leaders, Technology – Enterpeneurship – Finance – Economy – Politics & Lifestyle


What is aggregate stop-loss insurance?

Photo: Aggregate Stop-Loss Insurance Photo: Aggregate Stop-Loss Insurance

What Is Aggregate Stop-Loss Insurance?

The aggregate stop-loss insurance policy limits claim coverage to a certain amount. This coverage protects self-funded plans from catastrophic (particular stop-loss) or multiple (aggregate) claims. Aggregate stop-loss protects employers from unexpected claims. When claims exceed the aggregate limit, the stop-loss insurer pays or reimburses the employer.

Aggregate Stop-Loss Insurance

Self-funded insurance programs where an employer takes the financial risk of delivering healthcare benefits have aggregate stop-loss insurance. Unlike fully insured plans, self-funded businesses pay for each claim when it is presented. Stop-loss insurance resembles high-deductible insurance. An employer is responsible for deductible claim expenditures.

Traditional employee benefit insurance differs from stop-loss. Stop-loss only covers employers, not employees or health plan participants.

Uses of Aggregate Stop-Loss Insurance

Employers cover high-value claims with aggregate stop-loss insurance. Aggregate stop-loss insurance limits claims. When a maximum threshold is reached, the employer stops paying and may obtain refunds. Additional aggregate stop-loss insurance can be added to an existing plan or purchased separately. The barrier is based on attachment points, usually 125% of annual claims.

A variable aggregate stop-loss threshold is typical. The criterion changes as a percentage of an employer’s enrolled workers. This variable threshold is based on an aggregate attachment factor, crucial to stop-loss calculations.

Like high-deductible plans, most stop-loss policies feature low premiums. Since employers must pay over 100% of claims,

Total Stop-Loss Insurance Figures

Calculating stop-loss plan aggregate attachment:

  • Step 1: Employer and stop-loss insurance provider estimate monthly employee claims average dollar value. Usually $200–$500 monthly, depending on the employer’s estimate.
  • Step 2: Assume a $200 stop-loss plan value. Multiply this amount by the stop-loss attachment multiplier, usually 125%–175%. A $200 claims estimate and a 1.25 stop-loss attachment multiplier yield a $250 monthly deductible per employee.
  • Step 3: Multiply the deductible by the employer’s monthly plan enrollment. The first-month deductible for an employer with 100 employees is $25,000 ($250 x 100).
  • Step 4: Monthly enrollment may vary. Due to enrollment variety, aggregate stop-loss coverage may include monthly or annual deductibles.
  • Step 5: Employers may pay different monthly amounts with a monthly deductible. An annual deductible requires the employer to pay a yearly fee based on projections from the first month of coverage. Stop-loss programs often have an annual deductible slightly lower than the 12-month total.


  • Aggregate stop-loss insurance protects self-funded employers from unexpected claim payouts.
  • Like high-deductible insurance, stop-loss insurance holds the employer accountable for claims below the deductible.
  • The deductible or attachment for aggregate stop-loss insurance is based on an estimated monthly claim value, the number of enrolled employees, and a stop-loss attachment multiplier of 125% of projected claims.

You May Also Like

Photo: Autonomous Expenditures

Autonomous Expenditure

3 min read

Autonomous expenditures: what are they? The parts of the total spending of an economy that are unaffected by the actual amount of revenue in that same economy are referred to as autonomous expenditure...  Read more

Notice: The Biznob uses cookies to provide necessary website functionality, improve your experience and analyze our traffic. By using our website, you agree to our Privacy Policy and our Cookie Policy.