Small Business Benefits
Published by John Wiklund on February 23rd, 2023
You’ve probably heard of it, but what is stop-loss insurance and why does it matter for small to mid-sized employers?
Stop-loss insurance is purchased in combination with a self-funded, level funded health benefit plan design, and covers unusually high, unexpected claim activity. If medical claims paid by an employer’s self-funded health benefit plan are higher than the amount of money funded in the claim pre-fund account, they’re protected with stop-loss insurance. The stop-loss insurance takes effect and pays covered claims over the amount funded, which means if the entire group has high claims, or a group has specific coverage and an individual has a catastrophic claim, employers don’t need to worry.
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Aggregate Stop-Loss Insurance protects the employer from unusually high overall claims.
If covered claims for all covered persons in the group are more than the overall claim liability limit of the employer during the contract period, the stop-loss insurer reimburses the employer under the terms of the stop-loss insurance policy.
Specific Stop-Loss Insurance protects the employer from unusually high individual claims.
If covered claims for a particular covered person are more than the specific deductible during the contract year, the stop-loss insurer reimburses the employer under the terms of the stop-loss insurance policy.
Star Marketing and Administration, Inc. and Trustmark Life Insurance Company are affiliates with a long history of serving their customers. Because Star Marketing and Administration, Inc. administers its clients’ self-funded plans and Trustmark Life Insurance Company provides the stop-loss insurance, employers benefit. Here’s how:
Less risk for the employer: Stop-loss insurance from Trustmark Life Insurance Company includes advance funding. This means that if an employer has a large eligible claim but there isn’t enough money in the pre-fund account, Trustmark Life Insurance Company will advance the funds to the employer’s pre-fund account. The eligible claim is then paid and Trustmark Life Insurance Company recovers the funds in the following months as money is deposited in the claim pre-fund account.
No second guessing: Stop-loss carriers may question and audit claims and are not obligated to pay the claims in the event it disagrees with the third-party administrator’s decision. However, because we are affiliates, Trustmark supports the decisions of Star Marketing and Administration, Inc.
Interested in learning more?
Stop-loss insurance is purchased in combination with a self-funded, level funded health benefit plan design, and covers unusually high, unexpected claim activity. If medical claims paid by an employer’s self-funded health benefit plan are higher than the amount of money funded in the claim pre-fund account, they’re protected with stop-loss insurance. The stop-loss insurance takes effect and pays covered claims over the amount funded, which means if the entire group has high claims, or a group has specific coverage and an individual has a catastrophic claim, employers don’t need to worry.
Types of Stop-Loss Insurance: Aggregate and Specific
When purchasing stop-loss insurance, there are two different types of stop-loss insurance that cover the employer in different situations: aggregate and specific stop-loss insurance.Aggregate Stop-Loss Insurance protects the employer from unusually high overall claims.
If covered claims for all covered persons in the group are more than the overall claim liability limit of the employer during the contract period, the stop-loss insurer reimburses the employer under the terms of the stop-loss insurance policy.
Specific Stop-Loss Insurance protects the employer from unusually high individual claims.
If covered claims for a particular covered person are more than the specific deductible during the contract year, the stop-loss insurer reimburses the employer under the terms of the stop-loss insurance policy.
Stop-Loss Coverage That’s Seamless
We offer seamless integration of plan administration, stop-loss coverage and claim payment.Star Marketing and Administration, Inc. and Trustmark Life Insurance Company are affiliates with a long history of serving their customers. Because Star Marketing and Administration, Inc. administers its clients’ self-funded plans and Trustmark Life Insurance Company provides the stop-loss insurance, employers benefit. Here’s how:
Less risk for the employer: Stop-loss insurance from Trustmark Life Insurance Company includes advance funding. This means that if an employer has a large eligible claim but there isn’t enough money in the pre-fund account, Trustmark Life Insurance Company will advance the funds to the employer’s pre-fund account. The eligible claim is then paid and Trustmark Life Insurance Company recovers the funds in the following months as money is deposited in the claim pre-fund account.
No second guessing: Stop-loss carriers may question and audit claims and are not obligated to pay the claims in the event it disagrees with the third-party administrator’s decision. However, because we are affiliates, Trustmark supports the decisions of Star Marketing and Administration, Inc.
Interested in learning more?
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Written by John Wiklund
Vice President & Actuary
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Trustmark® and Trustmark Small Business Benefits® are trademarks of Trustmark Insurance Company. All other trademarks are the property of their respective owners, which are not affiliates of Star Marketing and Administration, Inc., and Trustmark Life Insurance Company.
Plan design availability and/or coverage may vary by state. Plans are administered by Star Marketing and Administration, Inc., and stop-loss insurance and ancillary coverage are provided by Trustmark Life Insurance Company.
Plan design availability and/or coverage may vary by state. Plans are administered by Star Marketing and Administration, Inc., and stop-loss insurance and ancillary coverage are provided by Trustmark Life Insurance Company.