The aggregating specific deductible goes by many names. You may have heard the term referred to as the aggregating specific corridor or more affectionately the Agg Spec or even simply the ASD. Regardless of what you call it, the ASD can be a critical element in your Stop Loss contract. When an aggregating specific deductible is employed, the client assumes additional liability in exchange for a lower premium. The ASD is a set dollar amount that is used to cover a single claimant or many claimants, who exceed the specific deductible. In some instances, a group’s claims may not reach their agg spec. In this case, the group would save the premium dollars they would have spent had they opted not to pursue an ASD. When the total claims paid meets the value of the ASD, the stop loss carrier assumes liability for any claims exceeding the deductible.
For example, a group opts to add a $100,000 aggregating specific deductible to their stop loss contract, which has a $150,000 specific deductible for each member. As in a standard stop loss contract, the group pays for all medical expenses up to $150,000 for all members. The first claims that exceed the $150,000 specific deductible, whether from a single member or several, are paid by the group’s aggregating specific deductible funds. Claims exceeding the $150,000 spec will continue to be paid by the group’s funds until the $100,000 has been paid out. At this point, the carrier will begin issuing reimbursements for additional claims.
The amount of an aggregating specific deductible is determined by the group and their financial ability to assume additional liability. Common ASDs range from $100,000 to $300,000 depending on group size but they can be much higher.
If you think your group may be in a good position to explore the use of an aggregating specific deductible check with your consultant. We would be happy to provide rate options with this feature during the upcoming renewals!