Players in the small group health plan stop-loss insurance market have different ideas about what typical stop-loss “attachment points” — the deductibles for self-insured health plans — really are.
Lee Johnson, president of Mid-American Benefits Inc., Omaha, Neb., says its typical client employer with 50 to 100 employees has a “specific” — per-employee — attachment of about $20,000 to $40,000.
Steve Gauldin, a vice president at TRISTAR Benefit Administrators, West Des Moines, Iowa, gives a range of $25,000 to $35,000 for a typical employer with 25 to 100 employees.
Becky Henderson of IMA Inc., Bossier City, La., says her company has only two small groups with specific stop-loss levels under $30,000. At IMA, she says, typical groups with 30 to 50 lives have specific attachment points of $30,000 to $50,000, and groups with 50 to 500 lives have attachment points of $50,000 to $125,000.
Blue Cross Blue Shield of Kansas, Topeka, Kan., says it offers specific attachment points of $10,000 to $75,000 for an employer with fewer than 100 employees.
Sandy Praeger, the Kansas insurance commissioner and chair of the Health Insurance and Managed Care Committee at the National Association of Insurance Commissioners (NAIC), Kansas City, Mo., gives a list of state minimums in a letter sent on behalf of the NAIC.
In states with minimum attachment points expressed in terms of dollars, the lower limit is $10,000 in Kansas, Maryland, North Dakota and Oregon; $15,000 in Colorado; and $20,000 in Maine.
The Employee Benefits Security Administration (EBSA), an arm of the U.S. Labor Department, has posted the comment letters that provide those figures in a collection of 108 responses to a 13-question EBSA request for information (RFI) on stop-loss that was released in April.
Employers that self-insure group health benefits use stop-loss programs to limit their risk. A specific attachment point is to an employer with a stop-loss program what a per-family-member deductible is to an individual John Doe who buys ordinary individual health insurance from XYZ Insurance.
Empployers and stop-loss providers also use aggregate attachment points, or, in effect, deductibles that apply to a whole plan, not just a specific enrollee.
EBSA and other agencies put out the stop-loss RFI in April, after receiving suggestions that some small employers might use stop-loss programs to avoid having to comply with the Patient Protection and Affordable Care Act of 2010 (PPACA).
PPACA exempts self-insured plans from having to meet many PPACA requirements.
Self-insured plans already are exempt from state benefits mandates.
But, “in general, selffunded employers tend to be more generous than average when it comes to premium contributions for the employees,” says Janet Trautwein, chief executive of the National Association of Health Underwriters (NAHU), Washington. “Since plan designs can be adapted to accommodate claims and the unique needs of the workforce, employers may be more apt to pay more towards overall employee premiums and may adjust coverage so that employees have more benefit costsharing.”
Horace Garfield, a vice president in the stop-loss business at Transamerica Employee Benefits, Little Rock, Ark., says his company sees fewer than 10% of employers with fewer than 100 employees self-insuring and expects that percentage to stay about the same in the foreseeable future.
“Transamerica does not believe that stop-loss insurance has a major impact on the small group fully insured market,” Garfield says.