Posted on March 18, 2015
WASHINGTON, March 18, 2015 – U.S. Senator Lamar Alexander (R-TN), chairman of the Senate health committee, Sen. Bill Cassidy (R-LA), and Representative Phil Roe (R-TN) today introduced the Self-Insurance Protection Act (SIPA) in the U.S. Senate and the U.S House of Representatives. This bill would ensure that employers can continue providing quality health benefits to their employees through self-insured group health plans.
Many employers who choose to self-insure and pay for their employees’ health care costs directly, instead of sending them to a health insurance company, will purchase “stop-loss” insurance to protect themselves against a claim that could cause financial hardship for the organization. In what is likely an effort to increase enrollment in the Obamacare exchanges, the Obama Administration has signaled an interest in ending stop-loss insurance as we know it. This would force many small employers to decide between offering self-insured employee health benefits and incurring the risk of a catastrophic medical claim, and offering a more expensive fully insured insurance plan, sending their employees into the individual market or Obamacare exchanges to purchase their own insurance.
“The Obama administration has already broken its promises to the millions of Americans who lost health care plans they were told they could keep,” said Sen. Alexander. “Instead of working with Republicans to fix the damage Obamacare has done, the president is threatening to take away more health care freedom by changing the rules for companies that self-insure, which could force millions more Americans to lose the employer-sponsored health care plans they like.”
“We need to protect health care options that give patients the power, like self-insured health plans,” said Sen. Cassidy. “By protecting stop-loss coverage, millions of employers can continue offering self-insured health plans to their employees without the risk of a health care claim hurting their business. This bill is one way to ensure many families can keep the doctors and the health care plans they have and like.”
“I am proud to introduce this commonsense bill that will protect employers that provide health insurance to employees through a self-insured group health plan. Stop-loss insurance is an essential tool for these employers, as it helps manage financial risk while providing employers more flexibility in designing the right plan for their workers,” said Rep. Phil Roe. “This legislation will simply prevent federal regulators from redefining and regulating this safeguard as traditional health insurance, which it was never intended to be. I thank Senators Cassidy and Alexander for their work on this important issue, and I look forward to continuing to push for certainty in health care for patients and employers alike.”
The Self-Insurance Protection Act clarifies existing law to ensure that federal regulators cannot re-define stop-loss insurance as traditional health insurance. Stop-loss insurance is not health insurance because it does not pay medical claims, have a network of physicians, or perform any of the traditional functions of health insurance.
Sixty-one percent of the commercial health insurance market, covering nearly 100 million Americans, is self-insured.
Senator Alexander originally introduced the bill in the Senate on November 19, 2013, and Dr. Cassidy introduced the bill in the House of Representatives on November 13, 2013.
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