Timothy Jost and others who represent consumers in proceedings at the National Association of Insurance Commissioners (NAIC) are scoffing at the idea that the Patient Protection and Affordable Care Act of 2010 (PPACA) will have little effect on the small-group health insurance market.
The NAIC consumer reps talk about how they see PPACA affecting the small group market in a comment on efforts to update the NAIC Stop-Loss Insurance Model Act of 1995.
Some are arguing that states or federal agencies should impose new minimum size limits on the stop-loss market, to keep small groups from using stop-loss programs to evade new PPACA insurance rules.
The ERISA Working Group, a part of the NAIC’s Health Insurance and Managed Care Committee, has posted the consumer reps’ comments and other stop-loss model update comments in the working group’s section of the NAIC website.
The working group plans to convene Aug. 11 in Atlanta, at the NAIC’s summer meeting.
Employers that self-insure often buy stop-loss insurance — insurance for group health plans — to limit their losses. A stop-loss program might include a “specific attachment point,” or per-employee deductible, and it might also include an “aggregate attachment point,” or whole-plan deductible.
State insurance regulators oversee the stop-loss market. The NAIC has some influence over the state stop-loss rules through the 1995 stop-loss model.
The Employee Retirement Income Security Act (ERISA) has exempted self-insured plans from the state benefits requirements that apply to fully insured group health plans, and PPACA now exempts self-insured plans from having to meet many of the new PPACA requirements.
Some PPACA watchers have suggested that small employers may try to use self-insured plans and stop-loss programs with low attachment points to avoid having to comply with PPACA.
Stop-loss market advocates and employer groups have argued that the small and midsize stop-loss plans now in the market tend to have lower administrative costs than insured plans and richer benefits, and that putting new, PPACA-related restrictions on self-insurance plans and stop-loss insurance could backfire, by increasing the cost of small and midsize group plans and reducing employers’ and workers’ access to the type of high-quality coverage they now enjoy.
The Employee Benefits Security Administration (EBSA), an arm of the U.S. Labor Department, and other federal agencies put out a request for comments on the matter in April.
Members of the NAIC’s Self-Insurance Subgroup have said they think an outside report done by actuaries in the Chicago office of Milliman Inc., supports the idea of increasing the amount of risk that a small employer that uses stop-loss insurance must keep before the stop-loss insurance kicks in.
Will Anything Really Change?
The ERISA Working Group is one of several arms of the NAIC looking at stop-loss market rules.
Jost and the other consumer reps note in their comment letter that commenters who oppose new stop-loss rules have raised procedural questions, such as whether the ERISA Working Group has the authority to look at the matter; whether updating the 1995 model act would be the right way to adjust stop-loss attachment points, if any adjustments are needed; and whether the stop-loss industry has enough chance to respond the stop-loss proposals under consideration.