Self-insurance group asks Congress for stop-loss help

He sponsored an earlier version of the bill, H.R. 1423, in the 114th Congress. That version attracted just two cosponsors.

Bill Cassidy, a Louisiana Republican who used to be in the House and is now in the Senate, sponsored the first House SIPA bill, H.R. 3462, in the 113th Congress. Cassidy attracted eight cosponsors.

Employers with self-insured plans can use Employee Retirement Income Security Act rules and interpretations that exempt self-insured plans from state health benefits mandates. Sponsors of self-insured plans can also use Affordable Care Act provisions that exempt self-insured plan sponsors from some of the ACA mandates that apply to fully insured group health plans.

Stop-loss insurance is an insurance product that protects insurance plans against catastrophic losses.

Many sponsors of self-insured health plans use stop-loss insurance, or insurance for insurance plans, to shield themselves against the possibility that some enrollees might need organ transplants, or a life-or-death medication that costs $100,000 per year.

Supporters of self-insured plans say that the plans help sponsors tailor coverage to meet employees’ health benefits needs, encourage employees to take care of themselves, and hold down costs.

Critics argue that access to self-insurance hurts the market for fully insured group health coverage, by pushing the employers with the youngest, healthiest workers to cut costs by self-insuring. When the employers with healthier workers self-insure, that pushes up costs still further in the fully insured market, by leaving the fully insured market with employers with older, sicker workers, the critics say.

Self-insurance critics also argue that some small employers might by using stop-loss insurance as if it were just high-deductible, fully insured health coverage, without understanding that employers using stop-loss insurance lack many of the legal protections they would have if they were using fully insured small-group health coverage.

Related:

RB Lewis agency may have shaped Trump’s health ideas

Self-insured plan group prepares to prepare for Trump

We’re on Facebook, are you?