The people who help small employers set up and run small self-funded health plans have been lobbying to keep the current stop-loss insurance guidelines in place.
Timothy Stoltzfus Jost, a law professor who speaks for consumer interest in proceedings at the National Association of Insurance Commissioners (NAIC), Kansas City, Mo., says he thinks that, in spite of the visibility of the campaign to keep stop-loss rules more or less the same, the health insurance industry itself is divided about stop-loss market rules.
Some health insurers already sell administrative services and stop-loss insurance to small employers, and those carriers seem to support the idea of maintaining or expanding very small groups' access to the stop-loss market, Jost said in an e-mail interview.
But "some that are unable to play in the stop-loss market…see this as a disaster, with themselves ending up the victims of cherry picking by stop-loss insurers," Jost said."It's like steroids in sports. Once one competitor gets in, others can't afford not to."
The Battle
Employers that self-insure against health risks often buy stop-loss insurance — insurance for group health plans — to protect themselves against catastrophic losses.
An NAIC stop-loss model adopted in 1995 recommends that stop-loss insurers discourage very small employers from viewing stop-loss as the equivalent of high-deductible major medical coverage by setting the stop-loss deductible for a claim filed by a single employee at a small self-insured plan at $20,000,and by setting a deductible of $4,000 times the number of people in the plan for the plan as a whole. Observers have pointed out that, in some cases, the lowest stop-loss deductibles may be on par with the deductibles required by high-deductible major medical plans.
Analysts in the Washington office of Deloitte looked at plans with 100 or more employees in 2011 and found that the percentage of employers that had plans that were partly or wholly self-insured ranged from 27% at employers with 100 to 199 workers to 76% at employers with 5,000 or more workers.
The Patient Protection and Affordable Care Act of 2010 (PPACA) exempts self-insured plans from many PPACA requirements, such as a minimum medical loss ratio (MLR) provision that requires insurers to spend at least 80% of small group plan revenue on health care and quality improvement efforts.
