Frequently Asked Questions
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What is the concept of self-funding?
In a self-funded contract, the employer adopts a plan document which outlines the benefit coverage and limitations of the group plan that are chosen by the employer. Rather than pay a monthly premium in advance to an insurance company for the coverage, the employer holds the premium and pays a smaller percentage of the total premium to an insurance company who will guarantee that individual and group claims do not exceed a predetermined limit. Eligible claims that are less than the predetermined individual and group limits are paid from the premium reserves which remain under the control of the employer.
What is stop-loss coverage?
To provide financial security against catastrophic losses, a "cap" or "stop-loss" must be placed on medical expenses regardless of the group size. This "cap" is provided through two different forms of insurance coverage: AGGREGATE EXCESS LOSS COVERAGE and INDIVIDUAL EXCESS LOSS COVERAGE (commonly called "Stop-Loss" insurance).
What is aggregate excess loss coverage?
AGGREGATE EXCESS LOSS provides a financial cap for the group as a whole. Essentially, it stops the entire group's losses at a predetermined dollar limit called the Annual Aggregate Deductible (or Attachment Point).
What is Individual or Specific excess loss coverage?
INDIVIDUAL EXCESS LOSS protects the loss fund from being depleted by large individual claims. It is an individual deductible that caps the losses at a predetermined dollar amount. The Stop-Loss Carrier will reimburse the employer or the plan for covered losses that are paid by the employer or the plan through Allegiance Benefit Plan Management, which exceed the individual or specific stop loss deductible under the terms as specified in the excess loss contract.