Self-Insurance Protection Act

Self-Insurance Protection Act

This bill specifies that stop-loss coverage is not health insurance coverage for purposes of regulation under the Employee Retirement Income Security Act of 1974.

Stop-loss policies are generally obtained by self-insured health plans or sponsors of self-insured group health plans to reimburse the plan or sponsor for losses incurred in providing health benefits to plan participants in excess of a level set forth in the stop-loss policy.

The bill also preempts state laws that prevent employers from obtaining stop-loss coverage.

The Self-Insurance Protection Act, also known as Bill 118 hr 2813, is a piece of legislation currently being considered by the US Congress. The main purpose of this bill is to protect self-insured health plans from being regulated by state insurance laws.

Self-insured health plans are those in which an employer assumes the financial risk for providing health care benefits to its employees, rather than purchasing a traditional insurance policy. These plans are subject to federal regulations under the Employee Retirement Income Security Act (ERISA), but some states have attempted to regulate them under their own insurance laws.

The Self-Insurance Protection Act aims to clarify that self-insured health plans are exempt from state insurance laws and should only be regulated at the federal level. Proponents of the bill argue that this will provide consistency and certainty for employers who choose to self-insure, as they will not have to navigate a patchwork of state regulations. Opponents of the bill, however, argue that it could weaken consumer protections and oversight of self-insured health plans. They are concerned that without state regulation, there may be less transparency and accountability in how these plans are managed and funded. Overall, the Self-Insurance Protection Act is a complex piece of legislation that seeks to address the regulatory framework for self-insured health plans. Its impact on employers, employees, and the health care system as a whole remains to be seen as it continues to be debated in Congress.