The Self-Insurance Institute of America hopes the newpresidential administration will help it get the third version of astop-loss defense measure signed into law.

The group is seeking congressional support for theSelf-Insurance Protection Act bill, a measure that would excludestop-loss insurance from the federal definition of healthinsurance.

The SIPA bill could help employers with smallself-insured plans get stop-loss insurance from entitiesother than major medical insurance providers, by blocking stateefforts to apply major medical insurance rules to small stop-lossarrangements.

Jay Ritchie, an executive from a stop-loss insurance issuer,testified on behalf of the SIPA bill March 1 at a hearing inWashington organized by the House Education and WorkforceCommittee.

Since the Affordable Care Act came along, “self-insurance hasbeen a viable option for some small businesses,” Ritchie said atthe hearing, which was streamed live on the web. “Passage of SIPAis needed to maintain that option.”

Witnesses at the hearing also testified on behalf of H.R. 1101,a bill that would encourage small businesses to join together toform multistate association health plans, and a draft of thePreserving Employee Wellness Programs Act, a bill backed by theAmerican Benefits Council.

Rep. Marcia Fudge, D-Ohio, said at the hearing that Republicanswere trying to distract voters from the fact that Republicans havetried to repeal the Affordable Care Act more than 60 times andstill have no replacement proposal.

The hearing “is nothing more than just stalling till they cancome up with a plan,” Fudge said. “They have no clue what todo.”

A recording of the hearing is available on the committeewebsite.

SIPA bill details

Rep. David Roe, R-Tenn., is preparing to re-introduce theSelf-Insurance Protection Act bill in the 115th Congress.

He sponsored an earlier version of the bill, H.R. 1423, in the114th Congress. That version attracted just two cosponsors.

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

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

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

Many sponsors of self-insured health plans use stop-lossinsurance to shield themselves against the possibility thatenrollees might run up huge bills because they need an organtransplant, or a life-or-death medication that costs $100,000 peryear.

Supporters of self-insured plans say that the plans helpsponsors tailor coverage to meet employees' health benefits needs,encourage employees to take care of themselves and hold downcosts.

Critics argue that access to self-insurance hurts the market forfully insured group health coverage by pushing the employers withthe 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 marketby leaving it with employers with older, sicker workers, thecritics say.

Self-insurance critics also argue that some small employersmight by using stop-loss insurance as if it were justhigh-deductible, fully insured health coverage, withoutunderstanding that employers using stop-loss insurance lack many ofthe legal protections they would have if they were using fullyinsured small-group health coverage.

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