Self-Insurance Protection Act

This bill says that “stop-loss” insurance used by employers who self-fund their workers’ health benefits is not the same as health insurance. It’s a backup policy that pays the employer or the plan when medical claims go over a set amount; it does not insure employees or pay doctors directly. It’s meant to protect company funds from very large or unexpected health claims.

It would also override state rules that block group health plans from getting this kind of protection against big or surprise claim costs, so plans can insure against these risks even if a state would otherwise prevent it.

• Who is affected: Employers that self-fund health benefits (both small and large), their employees, and state insurance regulators.
• What changes: Stop-loss coverage bought by a self-insured plan or its sponsor would not be treated as “health insurance coverage” under federal law, and federal rules would trump any state law that prevents a group health plan from insuring against excess or unexpected claim losses.
• When: Would take effect if enacted into law.