| Aggregate Factors/Aggregate Funding Factors |
| | Factors used to determine the aggregate stop loss funding level – usually expected claims plus a 25% margin. The factors look like, but are not, premium rates. |
| Aggregate Limit |
| | Under stop-loss insurance arrangements, the Aggregate Limit is the threshold at which medical claims become payable from the assets of the stop-loss carrier for the remainder of the policy year when claims for the group as a whole exceed the limits based on the factors outlined under the policy. |
| Aggregate Stop Loss |
| | Insurance that protects against an unusually high level of claims for the entire group. |
| Aggregating Specific |
| | The aggregating specific lowers the adjusted billable rate by 20 to 40%. This reduction then becomes an additional deductible, shifting fixed costs to the claim’s side. The additional deductible applies to the entire group not each person. |
| Attachment Point* |
| | Specified limit when a stop-loss insurance contract will pay for an individual or claim. The dollar amount above which specific stop-loss protection begins to pay is called the specific attachment point. |
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| Excess Risk |
| | Insurance coverage that takes effect after the initial liability of a claim (specific) or claims (aggregate) has been paid. Also referred to as Stop-Loss Insurance and Reinsurance |
| Expected Claims |
| | Expected Claims is the dollar amount or percentage (usually 80%) of the aggregate, which represents the expected claims that will be paid during the contract period. |
| Experience |
| | Refers to the history of actual claims paid during a period or the claims incurred during a period. |
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| Fixed Costs |
| | Those costs which are payable on a regular basis (monthly) and are not part of a claim. Examples of Fixed Costs are reinsurance premiums, PPO Access Fees and administrative costs. |
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| Incurred Basis |
| | Coverage in which the stop-loss provider is required to reimburse claims paid not only during a specified period but also calculates an additional contingency amount (or reserve). That calculated amount represents claims for procedures that have been performed but for which bills have not been received. |
| Incurred Claim |
| | An Incurred Claim is a claim that has happened but has not yet been submitted for processing and payment. |
| Incurred But Not Reported (IBNR) |
| | An IBNR is an estimate of incurred claims that have happened but have not yet been submitted for processing and payment. Incurred-paid Basis. Stop-loss coverage provided for claims incurred in the plan year and paid in the plan year. |
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| Lagged Claims |
| | Lagged claims represent the estimate of the time between when a claim is incurred and when it is submitted and processed for payment. |
| Lifetime Aggregate or Maximum |
| | The lifetime maximum benefit payment provided under a plan or insurance contract. |
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| Minimum Aggregate Deductible/Attachment Point |
| | The Minimum Aggregate Deductible or Minimum Attachment Point is the pre-determined level a stop-loss carrier will provide aggregate coverage for group that have a reduction in enrollment. The greater of the Minimum Aggregate Deductible/Attachment Point or the actual annual aggregate (based on actual monthly counts multiplied by the aggregate factor) must be met before medical claims become payable from the assets of the stop-loss carrier for the remainder of the policy year. The Minimum Annual Aggregate Deductible is based on a pre-determined percentage (generally 90% to 100%) of the Annual Aggregate Deductible, calculated by the greater of the quoted enrollment or the first’s month’ s enrollment multiplied by the monthly aggregate factor(s) and then multiplied by the number of contract months (normally 12 months). |
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| Paid Basis |
| | A Stop-loss contract basis in which stop-loss carriers reimburse claims incurred and paid in the period prior to, and during the term of the contract. |
| Paid Claim |
| | A Paid Claim is a claim that has been submitted and processed, and for which a draft (payment) has been issued by the administrator or insurance carrier. |
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| Reinsurance |
| | Insurance coverage that takes affect after the initial liability of a claim (specific) or claims (aggregate) has been paid. Also referred to as Stop-Loss and Excess Risk Insurance. |
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| Self-funded Plans |
| | Plans in which the employer and employees contribute, with contributions going to a trust fund to pay health care claims. In such a plan, a participant’s contribution obligation is set forth in a plan document or plan enrollment form, and is periodically deducted from the participant’s paycheck. |
| Spaggregate |
| | Spaggregate might be viewed as a blend of traditional specific and aggregate stop-loss and a fully insured program. It is designed to attain the stability and efficiency of the fully insured model, with the flexibility and creativity of an ERISA based plan, along with the claims funding arrangements allowed by the ERISA-based self-funded employer stop-loss model. A much higher proportion of total costs are paid as fixed costs, and the retained self-funded portion is much lower than traditional stop-loss. |
| Specific Limit |
| | The Specific Limit is the threshold at which medical claims become payable from the assets of the stop-loss carrier for the remainder of the policy year for an individual. |
| Stop-loss |
| | Feature of un-funded and self-funded plans in which the employer assumes the risk of health care costs up to a certain limit on individual claims (specific) or up to a certain limit on all claims combined (aggregate). An employer pays an insurance company to assume the risk above the specific and aggregate levels. Overall, stop-loss coverage can limit the employer’s risk while allowing it to retain control over claims and benefits. |
| Stop-loss Insurance, Aggregate |
| | Coverage under which no payments are made until the sum of all claims paid within the year exceeds a predetermined limit or aggregate attachment point. The stop-loss carrier sets the loss limit after evaluation of claims experience during the last three to five years and a projection of expected claims for the next year. |
| Stop-loss Insurance, Combination |
| | Under this program, both the individual claim and the maximum benefits cost are limited. This may be achieved by buying two policies (one specific and one aggregate excess), or both coverage’s may be written into one contract. |
| Stop-loss Insurance, Specific Excess |
| | Coverage that may be written on a per claim or per claimant basis (usually per claimant). The stop-loss carrier usually sets the minimum attachment point acceptable to it based on a review of the group’s census, expected claims, and past large losses of the program. The optimal specific level is often based on a percentage of the expected claims, usually 6% to 10%. |
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| Third party Administrator (TPA) |
| | A TPA is an Individual or company that accepts the responsibility for administering some or all of an employer’s benefits programs. |
| Trend Factor |
| | The percentage of increase used by an insurance company or plans to reflect the projected rise in health care costs. Calculation factors also include inflation, utilization, technology and geographic area. |
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| Underwriting |
| | Underwriting is a review of prospective and renewing cases for appropriate pricing, risk assessment and administrative feasibility. |
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