An employer that sponsors a self-insured benefit plan may be able to count a plan-related medical insurance stop-loss policy as its own asset, not a plan asset, even if the participants help pay for the plan coverage.
Louis Campagna, head of fiduciary interpretations at the Employee Benefits Security Administration (EBSA), gives that advice in a new ruling, Advisory Opinion 2015-02A.
Nancy Gerrie, a lawyer working with Schneider Electric Holdings Inc. and the holding company’s Schneider Electric USA Inc. subsidiary, asked how EBSA and EBSA’s parent, the U.S. Department of Labor, would classify sponsor-paid stop-loss coverage.
An employer with a self-insured medical plan can buy stop-loss insurance, or insurance for benefit plans, to insure itself against the possibility that the plan might receive huge, catastrophic claims.
See also: 5 top stop-loss enemies
In 1992, an official at the agency that later became EBSA, the Pension and Welfare Benefits Administration (PWBA), told the Self-Insurance Institute of America Inc. (SIIA) that a stop-loss policy connected with a fully employer-paid self-insured health plan would be the employer-sponsor’s asset, not the plan’s asset.
Because the stop-loss policy was the employer’s asset, not the plan’s asset, the plan could leave the stop-loss policy out of its annual reports, a PWBA official ruled.