Benefits brokers and benefit plan administrators have written to a panel at the National Association of Insurance Commissioners (NAIC) to ask it to leave the current rules governing small group health insurance stop-loss arrangements unchanged.
The panel — the ERISA Working Group, an arm of the Health Insurance and Managed Care Committee at the NAIC, Kansas City, Mo. — talked about stop-loss risk-retention requirements Saturday during a session in Atlanta, at the NAIC’s summer meeting.
Employers that create cash reserves to fund their health plans rather than buying traditional insurance often buy stop-loss insurance — insurance for group health plans — to protect themselves against catastrophic losses. A stop-loss program could have a per-employee “attachment point,” or deductible, a whole-plan deductible, or both.
Panels at the NAIC have been talking about the possibility of updating the NAIC’s Stop-Loss Insurance Model Act, which was approved in 1995. The ERISA Working Group is looking into the idea of amending the guidelines that help regulators, stop-loss providers and others apply the model act.
The per-employee attachment point could increase to $60,000, from $20,000, and the whole-plan deductible could increase to $15,000 times the number of people in the plan, from $4,000 times the number of people in the plan.
Only 3 states — Minnesota, New Hampshire and Vermont — have adopted the entire 1995 model; 18 other states have adopted parts of the model.
The Patient Protection and Affordable Care Act of 2010 (PPACA) exempts self-insured plans from many of the rules that apply to insured group plans. Some observers have argued that letting small employers use a combination of self-insurance and stop-loss arrangements with very low deductibles could help them evade the new PPACA rules.
If small employers self-insure, that could deprive the workers in those plans of protection from much-needed PPACA consumer protection provisions, PPACA supporters say.
If the small employers that self-insure have younger, healthier workers than the small employers that stick with insured plans, that could drive up rates for insured small group plans and destabilize the small group health insurance market, according to advocates of changing the stop-loss rules.