Members of the Self-Insurance Institute of America are getting ready to decide what they want to say now about efforts to change or repeal the Affordable Care Act.
The Simpsonville, South Carolina-based group represents the employers that sponsor self-insured insurance plans, the plan administrators, the stop-loss insurance providers, professional services providers, and other people and entities with an interest in the self-insured plan market.
The sponsors rely on a provision in the Employee Retirement Income Security Act of 1974 that exempts self-insured plans from state insurance regulation. In most cases, up until Affordable Care Act group health provisions started to take effect, she sponsors could decide for themselves how they wanted to structure their health benefits.
The ACA exempts self-insured plans from some major medical insurance provisions, but self-insured plans do have to comply with many other ACA requirements, such as complicated ACA employee counting and coverage reporting requirements, the ACA ban on annual and lifetime benefit limits, the ACA requirement that plan sponsors issue Summary of Benefits and Coverage and Uniform Glossary documents to plan enrollees, and the ACA requirement that major medical plans cover a standard package of high-value preventive services without making patients pay any cash out of pocket for those services.
The Obama administration and some Democrats in Congress have been working on efforts to discourage small employers from self-insuring, to hold traditional group health insurance premiums down by keeping good risks in the fully insured market.
In 2013, for example, as the ACA public exchange program was starting up and key ACA insurance rules were about to take effect, Ferguson testified before a House Small Business Committee subcommittee in defense of small self-insured plans. He squared off against critics who argued that expansion in the self-insured employer plan movement could hurt insurers, by pushing the best risks out of the fully insured market and driving up premiums for the remaining group insurance users. (See the hearing video at the end of this story.)
Donald Trump, the owner of companies that have sponsored self-insured plans with stop-loss coverage, is the president-elect. Republicans will have a strong majority in the House, and a narrow majority in the Senate. Trump and most congressional Republicans said while campaigning that they would fight to repeal the ACA.
Trump might like small self-insured plans: He used stop-loss insurance from Tokyo-based Tokio Marine HCC to support a self-insured health plan that his New York City-based Trump Payroll Corp. offered to about 100 employees in 2013, according to a plan information filing.
Jay Ritchie, an executive vice president at the Tokio Marine HCC stop-loss group, is the SIIA’s chairman-elect.
Ferguson declined even to say how the SIIA could go about trying to shape federal health policy in the next few years, let alone what the group might say to the Trump administration or Congress.
“It’s just been a week,” Ferguson said.
Overall, he said, ”self-funded plans are functioning fine.”
Many self-insured employers have started their benefit plan enrollment periods for their 2017 coverage. So far, he said, no acute problems have been severe enough to come to Ferguson’s attention.
But Ferguson said SIIA members have concerns about a number of chronic problems.
Self-insured plans’ problems
One is that the ACA ban on major medical plan annual and lifetime benefits limits is starting to change the way doctors and hospitals handle patients with severe health problems, Ferguson said.
Before, when many plans had a $1 million benefits limit, providers found a way to treat patients for less than $1 million, he said.
Now, “you’re seeing increased costs at the top end,” Ferguson said. “There’s an obvious increase.”
In some cases, the bills for one patient could be somewhere in the $20 million range, he said.
Another problem is the dramatic ACA-related increase in the size of the regulatory burden, Ferguson said.
Employers may have gotten used to sending out the benefits summaries and counting employees, but all of that compliance work is eating up employers’ time and money, and reducing the amount of time and money employers have to spend on running their operations, Ferguson said.
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