A push to limit employers’ access to stop-loss insurance has picked up steam, amounting to one of the biggest battles facing the industry in years.
Stop-loss insurance is state-regulated, and in the last year the topic has come up in legislatures across the country. By the end of 2013, four states had passed laws restricting stop-loss in one way or another.
Self-insured employers pay for most worker health costs directly. Stop-loss allows these employers to protect themselves from bigger claims that could wipe them out. About 60 percent of insured American workers are in self-insured plans. Most of these workers are either in unions or employed by larger companies.
As part of that effort, the Self-Insurance Protection Act that was introduced late last year by Rep. Bill Cassidy, R-La., and Sen. Lamar Alexander, R-Tenn. The legislation seeks to clarify existing law to ensure that federal regulators cannot re-define stop-loss insurance as traditional health insurance. Such a designation, they say, could force many self-insured entities that retain stop-loss insurance to discontinue their health plans.
If passed by Congress, the law would merely amend the Employee Retirement Income Security Act to exclude from the definition of health insurance coverage certain medical stop-loss insurance.
SIIA and other supporters take pains to point out the legislation does not amend the Patient Protection and Affordable Care Act and it does not direct the administration to implement the law in a specific way. Rather, it is “intended to ensure that small- and mid-sized private sector employers, as well as smaller Taft-Hartley Plans and public sector entities, are able to continue to provide quality health benefits to their workers and members through self-insured group health plans,” the statement said.
SIIA President and CEO Mike Ferguson said that “given the current disruption we are seeing in the individual health insurance marketplace due to how ACA implementation rules were crafted, the timing of this legislation is particularly important in order to prevent a similar scenario in the self-insured group health marketplace.