Private group insurance

Correct Answer: Stop-loss insurance

Stop-loss insurance is the correct term used in private group insurance for the coverage that employers purchase to protect against unexpectedly high claims. It provides a safety net by limiting the employer's liability for employee health benefit claims. Reinsurance refers to insurance purchased by insurance companies to mitigate their risk, excess claims insurance covers claims that exceed a certain amount, and captive insurance involves creating a licensed insurance company to provide coverage for its parent or related organizations. These alternatives do not specifically address the employer's protection against unusually high claims in a private group insurance setting.

Correct Answer: Modify the insurance plan to include riders or supplemental coverage for chronic conditions, ensuring equitable benefits.

Modifying the insurance plan to include riders or supplemental coverage for chronic conditions allows employees with specific health needs to receive the necessary benefits without significantly increasing the overall insurance costs for the company. This approach ensures equitable treatment of all employees by providing tailored options based on individual requirements. The other options either shift the responsibility to employees, potentially leading to inadequate coverage, uniformly increase costs which may be burdensome, or create separate plans that could result in inequity and administrative complexities.

Correct Answer: Stop-loss insurance

Stop-loss insurance is the appropriate mechanism that allows employers to limit their financial exposure from exceptionally high claims made by employees. It provides a safety net by covering claims that exceed a predefined threshold, thereby protecting the employer from significant financial burdens. The other options, such as reinsurance arrangements, risk-sharing agreements, and excess insurance coverage, either address different aspects of risk management or do not specifically target the limitation of financial exposure in the context of exceptionally high individual claims.