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🛡️ '''Specific stop-loss''' is a [[Definition:Reinsurance | reinsurance]] mechanism used in [[Definition:Self-insured retention (SIR) | self-insured]] and [[Definition:Employer stop-loss insurance | stop-loss]] arrangements that caps the amount a plan sponsor or self-funded employer pays on any single covered claim. Rather than limiting aggregate exposure across an entire book, specific stop-loss sets a per-claimant threshold — often called an [[Definition:Attachment point | attachment point]] — beyond which the [[Definition:Stop-loss carrier | stop-loss carrier]] reimburses the excess. This tool is fundamental in [[Definition:Group health insurance | group health]] and [[Definition:Employee benefits | employee benefits]] markets where employers assume direct responsibility for claim payments.

⚙️ When an employer self-funds its health plan, it bears the financial risk of each employee's medical costs up to a predetermined dollar amount — the specific deductible. If a single claimant's eligible expenses exceed that threshold during the policy period, the specific stop-loss coverage kicks in and the [[Definition:Insurance carrier | carrier]] pays the overage, subject to [[Definition:Policy terms and conditions | policy terms]]. The specific deductible is calibrated based on the employer's size, risk tolerance, and historical [[Definition:Claims experience | claims experience]], and it is typically reviewed at each [[Definition:Policy renewal | renewal]]. [[Definition:Third-party administrator (TPA) | Third-party administrators]] play a key role in tracking individual claim accumulations and filing timely notices with the stop-loss insurer once a claimant approaches the threshold.

💡 Without specific stop-loss protection, a single catastrophic claim — such as a premature birth, organ transplant, or advanced cancer treatment — could devastate an employer's benefit fund. By transferring the tail risk of high-cost individual claims to a stop-loss insurer, employers gain the cost advantages of self-funding while avoiding potentially ruinous single-claim exposure. This makes specific stop-loss one of the cornerstones of the self-funded insurance ecosystem and a significant line of business for carriers and [[Definition:Managing general underwriter (MGU) | MGUs]] that specialize in medical stop-loss.

'''Related concepts:'''
{{Div col|colwidth=20em}}
* [[Definition:Aggregate stop-loss]]
* [[Definition:Self-insured retention (SIR)]]
* [[Definition:Attachment point]]
* [[Definition:Employer stop-loss insurance]]
* [[Definition:Third-party administrator (TPA)]]
* [[Definition:Excess of loss reinsurance]]
{{Div col end}}

Definition:Specific stop-loss - Revision history

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