Some of the bigger small employers are thinking of stop-loss programs as a health benefits life raft.
Vendors hope to earn a profit by making the life raft more comfortable.
The Patient Protection and Affordable Care Act (PPACA) imposes many new requirements on fully insured group health plans on employers of all sizes. The law calls for “large employers” to be offering affordable minimum essential coverage (MEC) to 70 percent of their full-time workers already or else face the possibility of paying a big penalty in 2016.
If the Obama administration sticks to the current implementation schedule, smaller employers could have to comply with the MEC system rules in 2016.
The current size cut-off for “applicable large employers” is 100. The cut-off could fall to 50 next year.
Many PPACA rules apply to self-insured plans as well as insured plans, but some important rules, including rules that require affected plans to offer a standardized essential health benefits (EHB) package, apply only to insured plans.
In the past, most companies that self-insured were large. Today, some brokers see self-insuring as a way for companies with as a few as 20 employees to get more control over the benefits program and reduce mandate-related costs. Small employers generally manage the risk associated with sponsoring a small self-insured plan by buying stop-loss insurance, or insurance for health plans.
Some strong supporters of PPACA see the prospect of employer flight to stop-loss plans as a threat to the stability of the risk pool in the fully insured market.
In Maryland, for example, lawmakers are debating H.B. 703, a bill could increase the minimum stop-loss attachment point, or deductible, for an individual enrollee to $40,000, from $10,000 today.
See also: 5 Labor Department PPACA audit insights