The answer to this question is maybe.
Stop-loss insurance is used in self-funded health plans. It protects the plan sponsor against higher than expected claims. Specific stop-loss insurance protects the plan sponsor in the event that a participant has claims that exceed a certain amount, known as the specific attachment point. Aggregate stop-loss insurance protects the plan sponsor in the event that the total claims of all participants in the plan exceed a certain amount, known as the aggregate attachment point.
Like any insurance product, a stop-loss insurance policy is a contract between the insurance company and the insured. As such, it is subject to negotiation; both as to coverage and to pricing. That means that a plan sponsor can buy a stop-loss insurance contract the covers medical claims only, prescription drug claims only or both. It goes without saying that the premiums charged by the insurance company will depend upon the coverage provided by the contract.
It is not only coverage that depends upon the terms of the stop-loss insurance contract. Contract administration also depends upon the terms of the contract. A stop-loss policy may provide that prescription drugs are medical claims, depending upon where they are administered. In that case, the claims would be administered by the plan’s Third-Party Administrator (TPA). Alternatively, a stop-loss contract may provide that prescription drugs are not medical claims. In that case, the claims would be administered by the plan’s Pharmacy Benefit Manager (PBM). This matters because the TPA and the PBM may have different criteria for claims approval. One stop-loss contract may cover a particular prescription drug, while another may not.
For this reason, it is vital that a plan sponsor read its stop-loss policy and consult with an insurance expert to make sure that it is getting the coverage that it wants and expects.