In the past few years, there has been legislation introduced in several states that has called for new rules that impose limits on self-funded insurance plans and the stop loss insurance that they buy. There is a fear that these self-funded plans will appeal to companies with healthier workers and, as a result, drive up premiums for businesses that remain in typical plans. States that have introduced legislation include California, Maryland, Rhode Island, New York, Connecticut, with various degrees of success.
On a national level, members of Congress and several key players within the US Business Community and Taft-Hartley Plans have expressed support for Self-Insured Protection Act (SIPA), which was introduced to congress as S.775 and H.R. 1423 in March. The bill will clarify existing law to ensure that federal regulators cannot redefine stop loss insurance, which is truly a financial risk tool, as traditional health insurance. We discussed this issue in more detail in a previous post by guest blogger Ron Peck, Backdoor Regulation of Self-Funding.
Many self-insured plans would be forced to discontinue their health plans if federal and state regulators continue to advocate for identifying such plans as health insurance. At present, self-insured employee health plans cover approximately 100 million in the U.S. amounting to 61% of the commercial health insurance market.
Work continues to encourage bipartisan support of the bill. If you are interested in showing your support, please contact your legislators.