Anticipating a political move against stop-loss insurance plans,Congressional Republicans have introduced a bill to more closelydefine stop-loss insurance so that it cannot be lumped in withtraditional health insurance for purposes of complying with thePatient Protection and Affordable Care Act.

The Stop-Loss Insurance Protection Act was introduced by Sen.Bill Cassidy, R-Louisiana, and Senate HELP Committee Chairman LamarAlexander, R-Tennessee, and Rep. Phil Roe, R-Tennessee, to “ensurethat employers can continue providing quality health benefits totheir employees through self-insured group health plans,” said arelease from Roe's office.

The measure is designed to deflect any attempt by the WhiteHouse to include stop-loss coverage that protects employers fromhealth claims from being labeled as health coverage.

“In what is likely an effort to increase enrollment in theObamacare exchanges, the Obama administration has signaled aninterest in ending stop-loss insurance as we know it,” the releasefrom Roe's office said. “This would force many small employers todecide between offering self-insured employee health benefits andincurring the risk of a catastrophic medical claim, and offering amore expensive fully insured insurance plan, sending theiremployees into the individual market or Obamacare exchanges topurchase their own ‎insurance.”

The proposed legislation quickly drew the support of the SelfInsurance Defense Coalition, which sent a letter to the sponsorspraising their action on behalf of small and mid-sized employerswho purchase stop-loss insurance to protect themselves from afinancially crippling health claim by an employee. Employers whobuy stop-loss insurance typically self-insure for employee healthcoverage.

“Stop-loss insurance is utilized by most private and publicemployers with self-insured plans … to provide a financial backstopto reimburse the employer or the plan for catastrophic losses andto protect the plan and plan sponsor from financial insolvency,”the letter said, noting that stop-loss doesn't cover individualhealth claims.

“Self-insurance is one segment of the market that worksparticularly well for both plan sponsors and plan participants. Webelieve it is necessary to take action to preserve choice when itcomes to offering health benefits to workers, and to preventarbitrary limitations placed on self-insured group health plansthrough the reglulation of stop-loss insurance.”

The letter was signed by an array of business groups.