Short answer: The first number is the months of incurred claims the policy recognizes and the second is the months in which those claims must be paid. A 12/12 covers claims incurred and paid in the same 12 months, a 12/15 or 12/18 adds 3 or 6 months of run-out, and a 24/12 adds 12 months of run-in for claims incurred before the contract started.
Illustration for a contract starting January 1, 2026, with an incurred period of calendar year 2026:
- 12/12: claims must be paid by December 31, 2026.
- 12/15: paid by March 31, 2027 (3 months of run-out).
- 12/18: paid by June 30, 2027 (6 months).
- 12/24: paid by December 31, 2027 (12 months).
- 24/12: paid during 2026, but claims incurred in 2025 and 2026 can count (12 months of run-in).
A claim outside the window is the employer’s alone, even though the health plan still owes the benefit. Contract types vary by carrier, and each policy defines incurred and paid in its own terms, so write down the actual dates for both specific and aggregate coverage.
Run-in matters most in the first self-funded year or when changing stop-loss carriers; run-out matters most when the employer might leave self-funding.