The California Senate voted 24-13 Thursday to pass S.B. 1431, a bill that could regulate carriers ability to sell stop-loss arrangements — insurance for self-insured health plans — to employers with 2 to 50 lives.
The California Assembly now must decide which committees will have jurisdiction over consideration of the bill there.
Employers use self-funded plans in an effort to get more control over health benefits and reduce their cost.
In California, about 30% of employers with self-funded plans use stop-loss arrangements in an effort to limit possible plan losses, according to California Senate legislative analysts.
A typical stop-loss arrangement begins to make payments to a covered employer when losses reach a designated “attachment point.”
The amended version of S.B. 1431 that passed in the Senate states that a stop-loss arrangement sold to a California group with 2 to 50 lives would have to have an attachment point set at a figure equal to at least 120% of the expected claims.
Senate legislative analysts say S.B. 1431 also would:
- Require a stop-loss carrier to offer coverage to all employees and dependents of a small employer.
- Prohibit the stop-loss carrier from excluding any employee or dependent based on actual or expected health factors.
- Exempt multiple employer welfare arrangements (MEWAs) from any provisions of the bill.
S.B. 1431 was sponsored by the California Department of Insurance and introduced by Sen. Kevin de Leon, D-Los Angeles.