Aggregate Attachment Point

The aggregate attachment point is the total dollar amount of claims a self-funded plan must pay in a year before aggregate stop-loss insurance starts reimbursing. It's usually set at 125 percent of expected annual claims — meaning the plan is on the hook up to 25 percent above what it expected to spend, and everything above that is covered by aggregate stop-loss up to the policy limit.

The math works out to a corridor of risk the plan absorbs. If expected claims are $2 million, the aggregate attachment point sits at $2.5 million. If actual claims come in at $2.3 million, the plan pays the whole thing. If claims come in at $2.9 million, aggregate stop-loss reimburses the $400,000 above the attachment. Aggregate stop-loss only pays on claims that weren't already reimbursed by specific stop-loss — you don't double-collect. The 125 percent factor is standard but negotiable; tighter corridors (115 or 120 percent) cost more premium but cap plan risk sooner. Aggregate is what protects against a bad-luck year across the whole population; specific protects against one catastrophic member.

The takeaway: know your aggregate attachment point at the start of every plan year and track claims monthly against it. Crossing 90 percent of expected mid-year is a signal to tighten utilization management before the corridor closes.