Two forms of Stop-Loss Insurance exist to protect you, either in combination or separately: Specific Stop-Loss and Aggregate Stop-Loss.
Specific Stop-Loss is coverage that protects the plan from experiencing large losses on any one participant who has a serious/catastrophic accident or illness during a plan year. This is accomplished by setting a specific dollar amount to represent the maximum liability of the employer on any individual. When an individual participant's claims exceed the set maximum, the stop-loss coverage takes over for the employer, reimbursing them for any claims paid during the remainder of the plan year.
Aggregate Stop-Loss is coverage that protects the plan from exorbitant numbers of claims being paid on an entire group of participants within a plan year. Like Specific Stop-Loss, Aggregate Stop-Loss sets a maximum liability amount for the employer in a given plan year.