Specific Stop Loss

Stop-loss insurance (also known as excess insurance) is a product that provides protection against catastrophic or unpredictable losses. It is purchased by employers who have decided to self-fund their employee benefit plans, but do not want to assume 100{06cfe7980e8cb5a3c7255a56bb09b2993ed0d5004263a2998f5a28de74f144eb} of the liability for losses arising from the plans. Under a stop-loss policy, the insurance company becomes liable for losses that exceed certain limits called deductibles. There are two types of self-funded insurance:

Self Funded Plans

A self-funded plan, also known as a self-insured plan, is a health plan where the employer assumes the risk for paying health claims as opposed to purchasing an insurance policy from an insurance carrier, where the insurer assumes the risk.

With a self-funded plan, the company could save the profit margin that an insurance carrier adds to its premium. However, the downside is that the company is responsible for paying out claims itself and the potential risk is larger. Many employers purchase stop-loss insurance to mitigate this risk.

A level-funded plan is a type of self-insured plan wherein the employer pays a steady fee each month. For ACA Compliance purposes, these types of plans are treated the same.

Risk Management

Risk management is the process of identifying, assessing and controlling threats to an organization's capital and earnings. These threats, or risks, could stem from a wide variety of sources, including financial uncertainty, legal liabilities, strategic management errors, accidents and natural disasters. IT security threats and data-related risks, and the risk management strategies to alleviate them, have become a top priority for digitized companies. As a result, a risk management plan increasingly includes companies' processes for identifying and controlling threats to its digital assets, including proprietary corporate data, a customer's personally identifiable information (PII) and intellectual property.