Opinion

The fight to protect stop-loss

With the holidays here, the next few weeks are, thankfully, fairly quiet in Washington, D.C. There is a bit of business, however, I’d like to see get done.

Legislation has been introduced that would ensure regulators cannot redefine stop-loss insurance as traditional health insurance.

The Self-Insurance Protection Act was introduced by Rep. Bill Cassidy, R-La., and Sen. Lamar Alexander, R-Tenn., and so far, eight members of the Self-Insurance Defense Coalition, a lobbying organization, have signed onto a joint letter supporting it. Those members include the Self-Insurance Institute of America, U.S. Chamber of Commerce and National Association of Manufacturers.

The consequences of failing to pass this legislation aren’t of the trifling sort.

Many self-insured employers that rely on stop-loss insurance could be forced to discontinue their health plans if the bill doesn’t win approval.

As the SIDC noted in its letter, thousands of self-insured health plans across the country rely on stop-loss coverage to protect themselves in cases of catastrophic health care claims.

In fact, nearly 60 percent of workers receiving health insurance benefits in the private sector are covered by self-insured plans.

“As the health insurance market continues to evolve with the implementation of the Patient Protection and Affordable Care Act, Congress must act now to ensure that stop-loss coverage is duly and appropriately protected for consumers across the country. The Self-Insurance Protection Act would preclude harmful regulatory action that would limit access to stop-loss coverage, ensuring that groups seeking to self-insure are able to access the necessary tools to do so,” the SIDC said in its letter.

Employers are increasingly choosing to self-insure, in part because doing so helps them control costs better. A study by the nonpartisan Employee Benefit Research Institute found that about 59 percent of private-sector workers with health coverage were in self-insured plans in 2011, up from 41 percent in 1998.

Those in the industry worry the Obama administration wants to end stop-loss insurance as a way to push more Americans into the new health care reform exchanges. There’s no hard evidence to support that, but Health and Human Services Secretary Kathleen Sebelius has said her department is “interested in the possible effects of self-funded arrangements with stop-loss insurance on the risk pool and premiums in the fully-insured small group market.”

Employers of all sizes should be able to continue offering their employees self-insured health plans. It’s unfair – and unnecessary – to change the rules on employers in this way.

Congress should pass this bill as soon as it can. Unfortunately, the bill trackers at Govtrack.us gave the legislation a 1 percent chance of getting out of committee.

But we don’t need to allow gridlock in Washington to kill this legislation. Click here for more on this issue and how you might be able to help.

About the Author
Allen Greenberg

Allen Greenberg

Allen Greenberg is the retirement industry news editor at BenefitsPro.com. Follow him via Twitter @AllenGreenberg. Email him at agreenberg@benefitspro.com or call 720-895-3965.


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