One risk assumed by the employer in a self funded plan is catastrophic claims - those benefit payments beyond a reasonable and predictable level for one person. When claims exceed the specified individual stop loss deductible amount on any one person, the underwriting insurance company reimburses the employer's self funded plan for that person's claims which exceed that deductible amount, up to a pre-determined lifetime amount. The insured percentage is normally 100% and individual deductible amounts are available from $5,000 up to $200,000
How much covered medical claim liability do you want to assume on each participant this year? The dollar amount you select becomes the specific deductible. The lower the specific deductible, the higher the stop loss premium will be.
What happens when a participant's covered claims are below the specific deductible? The employer is responsible for the entire benefit payment.
What if the participant's covered medical claim(s) exceed the specific deductible during the plan year? The insurance company will reimburse your plan for the amount that exceeds the specific deductible.
How does the employer know if they need to make a stop loss claim? This is part of the services offered by JAD Solutions, LLC (JADS). Our system automatically monitors the individual claim amounts per plan year and informs JADS when stop loss communications need to occur. This significantly reduces the possibility that no valid stop loss claims will be overlooked.