April 20, 2017
Authored by: Katharine Finley and Chris Rylands
On April 5, the “Self-Insurance Protection Act” passed the House and moved to the Senate. This bill, if enacted, would amend ERISA, the Public Health Service Act and the Internal Revenue Code (the “Big 3” statutes containing ACA rules) to exclude from the definition of “health insurance coverage” any stop-loss policies obtained by self-insured health plans or a sponsor of a self-insured health plan. No additional guidance is given regarding what would constitute a “stop-loss policy” under the proposed definition. According to this fact sheet from one Congressional committee, the law appears to address concerns that HHS might one day decide to try and regulate stop-loss insurance. In our opinion, that seems unlikely under the current administration, but it could be a regulatory priority in future administrations.
But what does the Self-Insurance Protection Act mean for state regulation of stop-loss insurance?
As the Department of Labor noted in a prior technical release (and as we have written about previously), states have been attempting to regulate stop-loss insurance and have previously sought to include stop-loss insurance in the definition of “health insurance coverage” under certain circumstances (i.e., policies with attachment points below specified amounts). However, such laws have been found to be preempted by ERISA. In comparison, and as the DOL notes, state laws prohibiting insurers from issuing stop-loss policies with attachment points below specified thresholds