what is aggregate stop loss insurance 
aggregate stop loss insurance is a policy designed to limit claim coverage losses to a specific amount this coverage ensures that a catastrophic claim specific stop loss or numerous claims aggregate stop loss do not drain the financial reserves of a self funded plan aggregate stop loss protects the employer against claims that are higher than expected if total claims exceed the aggregate limit the stop loss insurer covers the claims or reimburses the employer understanding aggregate stop loss insuranceaggregate stop loss insurance is held for self funded insurance plans for which an employer assumes the financial risk of providing healthcare benefits to its employees in practical terms self funded employers pay for each claim as it is presented instead of paying a fixed premium to an insurance carrier for a fully insured plan stop loss insurance is similar to purchasing high deductible insurance the employer remains responsible for claim expenses under the deductible amount stop loss insurance differs from conventional employee benefit insurance stop loss only covers the employer and provides no direct coverage to employees and health plan participants aggregate stop loss insurance is used by employers as coverage for risk against a high value of claims aggregate stop loss insurance comes with a maximum level for claims when a maximum threshold is exceeded the employer no longer needs to make payments and may receive some reimbursements aggregate stop loss insurance can either be added to an existing insurance plan or purchased independently the threshold is calculated based on a certain percentage of projected costs called attachment points usually 125 of anticipated claims for the year an aggregate stop loss threshold is usually variable and not fixed this is because the threshold fluctuates as a percentage of an employer s enrolled employees the variable threshold is based on an aggregate attachment factor which is an important component in the calculation of a stop loss level as is the case with high deductible plans most stop loss plans will have relatively low premiums this is because the employer is expected to cover over 100 of the value of claims they receive according to the henry j kaiser family foundation 2018 employer health benefits survey insurers now offer health plans with a self funded option for small or medium sized employers these health plans incorporate stop loss insurance with low attachment points 1 aggregate stop loss insurance calculationsthe aggregate attachment associated with a stop loss plan is calculated as follows the employer and stop loss insurance provider estimate the average dollar value of claims expected by employee per month this value will depend on the employer s estimate but often ranges from 200 to 500 per month assume the stop loss plan uses a value of 200 this value would then be multiplied by the stop loss attachment multiplier which usually ranges from 125 to 175 using a claims estimate of 200 and a stop loss attachment multiplier of 1 25 the monthly deductible would be 250 per month per employee 200 x 1 25 250 this deductible must then be multiplied by the employer s plan enrollment for the month assuming that an employer has 100 employees in the first month of coverage their total deductible would be 25 000 for the month 250 x 100 enrollment can potentially vary per month due to enrollment variance aggregate stop loss coverage may have either a monthly deductible or an annual deductible with a monthly deductible the amount an employer must pay could change every month with an annual deductible the amount the employer must pay would be summed for the year and usually based on estimates from the initial month of coverage many stop loss plans will offer an annual deductible that is slightly lower than the summation of deductibles over 12 months 