The Sanford Group, a provider group, entered into a risk contract with a health plan. Sanford has purchased aggregate stop-loss coverage with an attachment point of 115% of the group's predicted healthcare costs of $2,000,000 for the year. Sanford has a copayment of 10% for any costs above the attachment point. If Sanford's actual costs for the year are $2,800,000, then, according to the terms of the aggregate stop-loss agreement, the amount that Sanford is responsible for is

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Sanford's attachment point is 115% of $2,000,000, which is $2,300,000. Sanford is responsible for costs up to this point. The excess cost is $2,800,000 - $2,300,000 = $500,000. Sanford pays 10% of this excess, which is $50,000. Therefore, Sanford's total responsibility is $2,300,000 + $50,000 = $2,350,000.

The Sanford Group, a Provider Group, Entered into a Risk