Contract basis is the first question
A 12/12 contract covers claims incurred and paid in the same twelve months. A 12/15 or paid-basis contract changes which claims fall inside the coverage period. Mismatches between the plan year, the TPA's payment cycle, and the stop-loss basis create uncovered gaps that only appear when a large claim lands near a boundary.
Lasering and individual exclusions
Carriers may apply a higher individual attachment point to a known high-cost claimant. That is a legitimate underwriting tool, but it moves specific, foreseeable risk back onto the plan's balance sheet. Model it before you accept it.
Disclosure obligations cut both ways
Failure to disclose known large claimants during underwriting is the most common basis for a denied reimbursement. Build the disclosure file with the same discipline you would apply to a lender's diligence request.
- Confirm who is responsible for gathering disclosure data — broker, TPA, or you.
- Document what was disclosed and when.
- Ask whether the carrier can reprice mid-term on new information.
Aggregate protection is not a formality
Aggregate stop-loss with a corridor set too high provides comfort rather than protection. Compare the aggregate attachment against a realistic bad-year scenario, not against expected claims.
Want this reviewed against your actual plan?
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