State and federal regulators have been talking for months about putting the brakes on the market for small self-insured health plans and the stop-loss insurers that protect those plans against catastrophic losses.
So far, though, the small-group self-insured plan market and the overall health stop-loss market seem to be doing well, according to Sam Fleet, president of the AmWINS Group Benefits Division, Warwick, R.I.
Fleet, who has become a highly visible promoter of the stop-loss industry, talked about the state of the industry today during a brief telephone interview.
“We’re quoting double the amount of small-group stop-loss this year than we were a year ago,” Fleet said.
Stop-loss rates seem to be increasing, and carriers have been less aggressive about competing for cases, Fleet said.
Regulators may be talking about changing the rules governing the stop-loss market, but the rules could take a while to change, if they do change, Fleet said.
An employer can “self insure” a health plan by simply setting aside cash to pay claims rather than relying on an outside company to pay the claims. The sponsors of the self-insured plans often use stop-loss arrangements to protect themselves against the risk that one patient will end up with huge bills or the plan as a whole will run up much higher-than-expected bills.
Many states set minimum stop-loss deductibles for small groups, to discourage employers from thinking of a small, low-deductible stop-loss plan as a form of ultra-flexible, lightly regulated major medical insurance.
California lawmakers have been working on a bill that could increase the minimum small-group stop-loss deductibles in that state, and the National Association of Insurance Commissioners (NAIC), Kansas City, Mo., has been looking into the idea of increasing the stop-loss deductible minimums it recommends.