What types of contract options are available under stop-loss coverage?
Many first year stop-loss contracts are written on an “Incurred and Paid” basis. This means that eligible claims that are incurred and paid during the 12 month contract period will be eligible for the stop-loss contract. This is referred to as “12/12” coverage. Paid Contracts – 24/12 and 15/12 Paid contracts may be used for the second and following years for a self-funded plan. The eligible claim expense can be incurred prior to the contract year, but must be paid during the contract year. There are limitations that apply to a paid contract. Some paid contracts set a limit to the time a claim can be incurred and still apply toward the contract. This time limit, called the run-in period, is usually between 90 days (15/12) and 12 month (24/12) before the contract year covered by the paid contract. Paid contracts may also limit the amount of eligible claims incurred prior to the year. Incurred Contracts – Extended Coverage 12/14, 12/18 and 12/24 Some self-funded plans are written on an “i
