Anticipating a political move against stop-loss insurance plans, Congressional Republicans have introduced a bill to more closely define stop-loss insurance so that it cannot be lumped in with traditional health insurance for purposes of complying with the Patient Protection and Affordable Care Act.
The Stop-Loss Insurance Protection Act was introduced by Sen. Bill Cassidy, R-Louisiana, and Senate HELP Committee Chairman Lamar Alexander, R-Tennessee, and Rep. Phil Roe, R-Tennessee, to “ensure that employers can continue providing quality health benefits to their employees through self-insured group health plans,” said a release from Roe's office.
The measure is designed to deflect any attempt by the White House to include stop-loss coverage that protects employers from health claims from being labeled as health coverage.
“In what is likely an effort to increase enrollment in the Obamacare exchanges, the Obama administration has signaled an interest in ending stop-loss insurance as we know it,” the release from Roe's office said. “This would force many small employers to decide between offering self-insured employee health benefits and incurring the risk of a catastrophic medical claim, and offering a more expensive fully insured insurance plan, sending their employees into the individual market or Obamacare exchanges to purchase their own insurance.”
The proposed legislation quickly drew the support of the Self Insurance Defense Coalition, which sent a letter to the sponsors praising their action on behalf of small and mid-sized employers who purchase stop-loss insurance to protect themselves from a financially crippling health claim by an employee. Employers who buy stop-loss insurance typically self-insure for employee health coverage.
“Stop-loss insurance is utilized by most private and public employers with self-insured plans … to provide a financial backstop to reimburse the employer or the plan for catastrophic losses and to protect the plan and plan sponsor from financial insolvency,” the letter said, noting that stop-loss doesn't cover individual health claims.
“Self-insurance is one segment of the market that works particularly well for both plan sponsors and plan participants. We believe it is necessary to take action to preserve choice when it comes to offering health benefits to workers, and to prevent arbitrary limitations placed on self-insured group health plans through the reglulation of stop-loss insurance.”
The letter was signed by an array of business groups.
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Dan Cook
Dan Cook is a journalist and communications consultant based in Portland, OR. During his journalism career he has been a reporter and editor for a variety of media companies, including American Lawyer Media, BusinessWeek, Newhouse Newspapers, Knight-Ridder, Time Inc., and Reuters. He specializes in health care and insurance related coverage for BenefitsPRO.
