Short answer: It is an extra layer the employer keeps above the ordinary specific deductible: claim dollars over the specific deductible go into a fixed-dollar fund the employer pays, and reimbursement starts only after that fund is used up. It lowers premium in exchange for more risk and is not the same as aggregate stop-loss.
Example from one carrier’s illustration: specific deductible $200,000 and aggregating specific loss fund $75,000. Three claimants exceed the deductible by $50,000, $55,000 and $35,000, a total of $140,000. The first $75,000 of that excess fills the fund, so the carrier reimburses $65,000.
The trade-off: in that illustration the premium dropped from $260,000 to $200,000. With $41,000 of excess claims the employer saved $19,000; with $65,000 of excess claims it cost $5,000 more.
In that carrier’s terms, amounts in the fund do not count toward aggregate coverage. A quote that shows only the ordinary specific deductible can hide this layer, so ask for it on the comparison. It does not change employees’ medical benefits.