Who is protected by stop loss reimbursements?

Who is protected by stop loss reimbursements?

• A. The individuals on the plan.
• B. The plan sponsor.
• C. The health insurance regulator.
• D. The providers.

Answer: (B)

Stop-loss reimbursements are a risk-transfer mechanism that protects the employer who sponsors a self-funded health plan. The plan sponsor buys stop-loss coverage to cap potential high claims. When individual or overall claims exceed the agreed thresholds, the insurer reimburses the plan, reducing the sponsor’s out-of-pocket costs. This protects the sponsor’s budget, rather than individual plan members, regulators, or providers, who do not receive stop-loss reimbursements.

Stop-loss reimbursements are a risk-transfer mechanism that protects the employer who sponsors a self-funded health plan. The plan sponsor buys stop-loss coverage to cap potential high claims. When individual or overall claims exceed the agreed thresholds, the insurer reimburses the plan, reducing the sponsor’s out-of-pocket costs. This protects the sponsor’s budget, rather than individual plan members, regulators, or providers, who do not receive stop-loss reimbursements.