Rhode Island and Minnesota legislators have introduced bills that would restrict sale of some medical stop-loss insurance to captive insurers who self-fund their medical insurance.
The bills are H.B. 647 in Minnesota, and H.B. 5499 in Rhode Island.
They would bar medical stop-loss insurers from selling policies to self-insured employers of all sizes with specific deductibles less than $60,000.
They join California in proposing such legislation. Legislators in California introduced similar legislation last year as well, but passage was thwarted by strong opposition from the Self-Insurance Institute of America, which lobbies on behalf of risk-retention groups, especially in the healthcare area.
Mike Ferguson, SIIA chief operating officer, anticipates that several more states will propose such legislation in coming months.
He said stop-loss insurance is necessary for all but the largest risk-retention groups, because it ensures that the fund will not be wiped out in the event of a catastrophic loss.
Self-insureds and their trade groups perceive this as a back-door effort by states to impose greater regulation on self-insureds, or risk-retention groups, because they are barred by a 1987 federal law from regulating them directly.