Should Congress Clarify That Stop-Loss Insurance Isn’t Considered Health Insurance? (H.R. 1304)
Do you support or oppose this bill?
What is H.R. 1304?
(Updated June 18, 2019)
This bill would clarify that stop-loss insurance policies obtained by a group health plan that self-insures the health risks of plan participants are excluded from the definition of health insurance in relevant federal laws. Stop-loss insurance is commonly purchased by businesses that choose to self-insure and pay for their employees’ medical expenses rather than buying a group health insurance plan. It pays for an employee or family member’s medical bills after the purchaser of the stop-loss insurance has already paid out a predetermined amount of the beneficiary’s medical bills. This protects buyers of stop-loss coverage from having to cover catastrophic claims.
Argument in favor
Companies that self insure need access to stop loss insurance, which would become unaffordable if it were regulated as if it were health insurance and consequently employees would have fewer options to get their healthcare paid for.
Argument opposed
This bill could create unintended consequences related to the ability of states to regulate stop-loss insurance and doesn’t do enough to address those concerns despite the bipartisan changes made to the bill’s text.
Impact
Employees that work for businesses that self-insure and those companies; state regulators; and federal regulators.
Cost of H.R. 1304
A CBO cost estimate is unavailable.
Additional Info
In-Depth: Sponsoring Rep. Phil Roe (R-TN) also introduced this bill during the 114th Congress, saying at the time that it would help businesses that self-insure continue to provide for their healthcare expenses of their workers:
“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. This legislation will simply prevent federal regulators from redefining and regulating this safeguard as traditional health insurance, which it was never intended to be.”
Democrats on the House Education & Workforce Committee mentioned in the bill’s committee report that while they “continue to be concerned about the lack of clarity of the legislation and the possible unintended consequences, Committee Democrats have worked with the Majority to ensure that report language addresses some of these concerns.”
The committee passed this bill on a voice vote, and has the support of seven Republican cosponsors in the House.
This legislation was introduced during the 114th Congress to counteract an anticipated move by the Obama administration to redefine stop-loss insurance as health insurance and thus subject it to the Affordable Care Act (commonly known as Obamacare).
Media:
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House Education & Workforce Committee Press Release
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National Law Review
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ThinkAdvisor
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U.S. Chamber of Commerce (Previous Version - In Favor)
Summary by Eric Revell
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