Full Definition
Stop-loss insurance (also called excess loss insurance) is a form of reinsurance purchased by self-funded employers to limit their exposure to catastrophic medical claims. It comes in two forms: specific stop-loss (per-individual coverage above a deductible) and aggregate stop-loss (total plan coverage above an attachment point). Stop-loss is not health insurance — it is a contract between the employer and the stop-loss carrier, not a benefit to employees.