How stop loss insurance works
When you establish an account with 501(c) Agencies Trust, we calculate your annual deposit amount based on your organization's size and claims experience. Your deposits go into your own individual reserve account, which is used to reimburse the state for your employees' unemployment claims.
Your organization is also assigned a deductible. When your claims exceed your deductible, stop loss insurance repays your reserve account for the difference:
For example: If your deductible is $20,000 per year and next year you have claims of $30,000, which is much higher than usual, then $30,000 would be paid from your reserve account, but stop loss insurance would repay your account $10,000 to ensure you only pay your deductible.
Actual claims - Deductible = Stop loss payment
So:
$30,000 actual claims - $20,000 deductible = $10,000 stop loss payment