The liberal "attack" on stop-loss insurance for small business has taken the form of law in California, though the legislation does offer some relief for those who have already purchased the catastrophic coverage for their businesses.

Stop-loss insurance has been a favorite among many small businesses looking to protect themselves from the financial toll an injury or illness to one or a few key employees can take on their enterprise. While not actual health coverage, stop-loss has been seen by healthcare reform advocates as an alternative to purchasing coverage for workers via the state exchange system — and thus it becomes a way for businesses to bypass exchange coverage.

To counteract the trend, several states have been tossing around legislation that would prohibit or restrict the sale of stop-loss coverage to small businesses. California's new law, signed by Gov. Jerry Brown this week, takes somewhat of a middle course.