What is an ISL policy?

Answer 1

From a website, I got the following explanation: An Individual Stop Loss (ISL) policy allows self-funded employers to protect themselves from large claims incurred by an individual employee or dependent.

When an employee or dependent's covered claims exceed the ISL deductible, covered amounts in excess of the deductible are reimbursable to the employer under the ISL policy.

What this means in plain English is that a company self-insures against a given risk up to a certain amount. This amount represents the deductible. For claims that would exceed the deductible, the ISL policy coverage kicks in.

Obviously, these ISL policy premiums should be very sensitive to the level of self insurance (or risk) a company is willing to take on. The lower the self insured risk (or lower the deductible) the higher the premium will be.

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