Stop-loss

Insurance that caps an employer's exposure under ASO.

Stop-loss reimburses claims above an agreed threshold, either per claimant (individual) or across the whole plan (aggregate). It is what converts ASO from an uncapped liability into a bounded one.

The threshold is the real decision: lower thresholds cost more premium and move the economics back toward fully insured; higher ones retain more risk and more potential saving.

What this means for a BC plan

Any BC employer considering ASO should price stop-loss in the same exercise. ASO modelled without it understates the true cost and overstates the saving.

Related terms

Where this comes up

Fully insured vs ASO · All glossary terms · Ask an advisor directly

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