Members of the House today voted 400-16 for the Self-Insurance Protection Act bill.

The bill, H.R. 1304, would block federal efforts to regulate small stop-loss plans as health insurance by excluding the plans from the federal definition of "health insurance coverage."

All 230 of the Republicans who voted supported passage.

Just 16 of the 186 Democrats who participated opposed passage; the other 170 joined with Republicans to support passage. Self-Insurance Institute of America President Mike Ferguson says one concern has been catastrophic claims.

Employers self-insure their health plans to get more control over the plans, and to take advantage of federal rules that preempt state efforts to regulate employee benefits. States can regulate the insurance that insurers provide for group health plans, but states cannot regulate the benefit plans themselves.

Sponsors of self-insured plans often use stop-loss, or insurance for insurance plans, to protect themselves against catastrophic losses.

Some consumer groups, regulators, insurers and others have suggested that very small employers may be making more use of self-insurance to avoid Affordable Care Act benefits requirements, consumer protection requirements and other requirements.

Observers have said that those may be using stop-loss insurance arrangements with attachment points, or deductibles, of $50,000 or less as if the arrangements were high-deductible major medical coverage, without understanding that stop-loss carriers operate outside the rules that apply to major medical coverage.

Some states have tried to discourage small employers from self-insuring by imposing small-group major medical rules on small stop-loss arrangements.

Rep. David Roe, R-Tenn., the lead sponsor of H.R. 1304, has argued that self-insurance and stop-loss are popular options that help many large employers offer solid coverage at a reasonable cost.

Rep. Virginia Foxx, R-N.C., said Wednesday on the floor of the House that self-insured plans and stop-loss insurance are popular with labor unions as well as with schools, cities, counties and other nonprofit employers, in part because the sponsors of the plans can do a better job than sponsors of fully insured plans of tailoring the benefits to fit the enrollees' needs.

"Stop-loss has never been regulated as health insurance by the federal government, ever," Foxx said during floor debate, which was streamed live on the web.

Obama administration officials started to make efforts to control stop-loss insurance to consolidate their grip on the health insurance market, Foxx said.

Rep. Bobby Scott, D-Va., who voted for H.R. 1304, criticized the bill, and the idea of small employers self-insuring, on the House floor.

"Employees are at risk of receiving fewer benefits," Scott said.

Scott said, however, that a clarifying note added to a bill report at the committee level suggests that H.R. 1304 should not actually affect the ability of the states to regulate stop-loss insurance. Because the federal government is not currently regulating stop-loss insurance, the bill should not have any affect on current stop-loss market regulation, he said.

Instant Insights /

House passes stop-loss definition bill by huge margin

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