CARD Q077
An employer self-funds health claims and buys protection above a specified claims threshold. What is that protection?
- Stop-loss insurance
- A fully insured group medical policy
- An individual disability-income policy
- An employee hospital indemnity policy
Stop-loss insurance
Employer stop-loss limits the employer’s claims exposure under its terms. It is different from the member’s out-of-pocket maximum.
Why each choice is right or wrong
A. Stop-loss insurance
Correct. Employer stop-loss limits the employer’s claims exposure under its terms. It is different from the member’s out-of-pocket maximum.
B. A fully insured group medical policy
Incorrect. In a fully insured plan, the insurer assumes covered claims under the policy; this employer retains claims and adds stop-loss.
C. An individual disability-income policy
Incorrect. Individual disability income replaces qualifying earnings rather than employer health-claim exposure.
D. An employee hospital indemnity policy
Incorrect. Hospital indemnity pays scheduled member benefits rather than employer stop-loss protection.
Review the related terms
Use these lessons to revisit the concepts and try additional practice questions.