Stop-loss and a hospital abroad: what can be established, and what is not public
Stop-loss decides whether one large claim is survivable for a self-funded plan. The public record covers who regulates it and what an attachment point is. It does not cover what any carrier's policy actually says about a hospital abroad.
Published November 8, 2026
9 min read
Information provided is for general reference only and does not constitute medical advice. Consult a qualified healthcare professional before making medical decisions.
Stop-loss insurance covers a self-funded plan's claims above an attachment point, and a model law sets that point no lower than $20,000 per person, or 110 percent of expected claims for a large group's aggregate cover. The Department of Labor says it "more often" insures only the employer. No public source contains a carrier's wording on care abroad.
Sylk Health. Current as of October 2026.
A plan can amend its own documents to cover care at a hospital abroad. It cannot amend its stop-loss contract, because the other party to that one is an insurer. This post sets out what is publicly establishable about that contract and is plain about where the record stops, which is earlier than anyone would like.
What is stop-loss insurance?
It is cover for the employer, not for the employee. The Department of Labor's technical release on stop-loss (opens in new tab) gives the clearest description available: stop-loss contracts "protect against claims that are catastrophic or unpredictable in nature by covering claims costs that exceed a set amount – an attachment point – for either a single enrollee or for aggregate claims over a determined period."
The second half of the same passage is the part that matters for a plan member: "Stop-loss insurance generally is not treated as health insurance under State law. It does not usually guarantee the payment of benefits to plan participants. More often, it only insures the employer against losses."
The contract therefore sits between the sponsor and the carrier. A participant is not a beneficiary of it, and whether a foreign claim is reimbursable is a question between two commercial parties.
Who regulates it?
The states do, and the Department has said so. It "takes the view that States may regulate insurance policies issued to plans or plan sponsors, including stop-loss insurance policies", where the law regulates the insurance company and the business of insurance.
The Department also records why this was contested, and the statute it names is the Employee Retirement Income Security Act (ERISA), the federal law governing most employer plans: "As a result of this statutory provision, States have been uncertain of their ability to regulate the use of stop-loss insurance by self-insured group health plans governed by ERISA." Its conclusion is that a state law setting minimum attachment points "would not, in the Department's view, be preempted by ERISA." In 2014 it recorded that "about ten States have enacted laws using the same approach as the NAIC model."
What floors apply to an attachment point?
The attachment point is the number that decides everything. The Department explains the concern plainly: "Unless prohibited by State insurance law, a stop-loss insurer might offer insurance policies with attachment points set so low that the insurer assumes nearly all the employer's claims risk", which would make the arrangement insurance in substance while being self-funding in form.
The National Association of Insurance Commissioners responded with a model act (opens in new tab) that sets floors. Maryland, whose statute (opens in new tab) was the subject of the litigation the Department describes, now sets its own, higher figures. The table below compares the two.
Instrument
Specific attachment point floor
Aggregate attachment point floor
Model act, groups of 50 or fewer
$20,000
Greater of $4,000 per member, 120% of expected claims, or $20,000
Model act, groups of 51 or more
$20,000
110% of expected claims
Maryland statute, current
$22,500
120% of expected claims
Maryland, policies issued before 1 June 2015
$10,000
115% of expected claims
Those are floors on how low a point may go, not ceilings, and the model act is a model rather than law until a state adopts it. Both instruments also say what they do not do. The model act states that "Nothing in this act shall be construed as imposing any requirement or duty on any person other than an insurer", and the Maryland statute carries almost the same words.
What does the public record not contain?
Here the post turns into an account of absence, which we would rather report than paper over. We looked for a carrier's stop-loss policy wording and did not obtain one. Three carrier product pages we tried returned an error, a block or no connection. Maryland's filing access portal, archived October 2025 (opens in new tab) states that "You may review those filings by clicking "Begin Search" above", but the search sits behind a click-through agreement and could not be reached by our tools.
That leaves three things we do not print:
No exclusion, definition or territorial limit. We quote no exclusion, no definition of an eligible provider and no territorial limitation, because we have not read one. A broker's summary of a policy is not a policy.
No notification duty, in either direction. We found no duty on a plan sponsor to notify its carrier of a change in benefit design or in where care may be obtained, in the Department's guidance, the model act or the Maryland statute. That finding is as narrow as it sounds. It says nothing about other states, and nothing about what any particular policy requires.
No reading of silence as permission. A policy that does not mention care abroad has not thereby agreed to pay for it. Only the document can say.
Maryland does impose a duty running the other way: before contracting with a small employer, a carrier must disclose "the total costs of the policy or contract", "the aggregate attachment point and the specific attachment point for the policy or contract; and (iv) any limitations on coverage." That is the carrier telling the employer at the outset, not the employer telling the carrier about a later change.
What does the market say about price?
One survey publishes figures. The Aegis Risk 2026 Medical Stop Loss Premium Survey (opens in new tab) describes itself as representing "1,378 plan policies covering over 1,400,000 employees with over $1.5 billion in annual stop loss premium." It reports average premium ranging "from $260.63 per employee per month (PEPM) for a $100,000 Individual deductible to $58.82 PEPM for a $500,000 Individual deductible", and states that annual increases from 2025 to 2026 "confirm increases from 13.6% to 15.9% or higher as the stop loss deductible increases", as printed.
These are one firm's survey figures on its own terms. They say nothing about care abroad, and we reproduce them as a description of the market, not as a benchmark for any plan.
Frequently asked questions
Does stop-loss insurance pay plan members directly?
Usually not. The Department of Labor's 2014 technical release states that stop-loss "does not usually guarantee the payment of benefits to plan participants. More often, it only insures the employer against losses." The plan pays the member's claim under its own terms, and the stop-loss carrier reimburses the employer above the attachment point, if the policy covers the claim.
Can a state set a minimum attachment point for a self-funded plan's stop-loss?
The Department of Labor's view is that it can. Its 2014 release states that "a State law that prohibits insurers from issuing stop-loss contracts with attachment points below specified levels would not, in the Department's view, be preempted by ERISA." The model act sets a floor of $20,000 per person, and Maryland's current statute sets $22,500.
Does a stop-loss policy cover a claim from a hospital outside the United States?
No public source answers that. No carrier policy wording we tried to obtain was public, and the Department's guidance, the model act and the Maryland statute are all silent on territory. The answer is in the policy a sponsor holds, read against its two attachment points and any limitation on coverage the carrier disclosed. That reading is a task for counsel.
What stop-loss insurance leaves a plan sponsor with
Three things about stop-loss insurance are established. The contract is with the carrier and not with the participant. The states regulate it, and the federal position supports their doing so. Attachment points have floors where a state has adopted the model act or set its own.
Everything else is in a document the sponsor holds and the public does not. Whether a claim from a hospital in another country falls inside the cover, whether the carrier must be told before the benefit design changes, and what happens if it is not, are all answerable only by reading the contract with someone qualified to read it. Our post on what a self-funded plan's documents have to say covers the half of the question a sponsor controls, and our page for employers sets out what we supply.
We supply a price and nothing else, we hold no relationship with any carrier, and we do not advise on plan design. We would rather record that the public trail stops here than imply we know what a policy says.
This article is general information about published federal guidance, a model act, a state statute and a market survey. It is not legal, tax, insurance or financial advice; consult counsel on any plan or stop-loss decision.
Disclosure: Sylk Health supplies procedure-price data and earns a commission from providers on bookings completed through its platform. It would benefit from broader use of externally benchmarked prices for medical procedures, and from any gap between those prices and prices in the United States.
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