SIIA lashes out at proposed stop-loss legislation

The Self-Insurance Institute of America (SIIA) sent a letter to California Senator Ed Hernandez voicing their official opposition to Bill SB 161, which the association maintains would “effectively eliminate the self-insurance option for smaller employers in that state by restricting the availability of stop-loss insurance”. A hearing for the bill was held before the Senate Health Care Committee on May 1st.

The bill stipulates that stop-loss insurers cannot exclude any employee or dependent on the basis of pre-existing conditions, would require a stop-loss insurer to renew, at the option of the small employer, all stop-loss insurance policies and prohibit stop-loss policies issued to a small employer from containing certain individual or aggregate attachment points for a policy year.

The SIIA wrote : “given that smaller employers in particular face financial challenges in providing quality health benefits for their employees and their dependents, it is more important than ever that they have as many coverage options as possible, including self-insured group health plans. By restricting the availability of medical stop-loss insurance through minimum attachment point requirements, SB 161 compromises the viability of the self-insurance option.”

The letter goes on to say that, despite the willingness of some industry stakeholders to negotiate attachment point requirements, the SIIA opposes such regulation outright. They write: “the marketplace, not the government, should dictate appropriate risk transfer arrangements for these employers who are providing quality health benefits on a voluntary basis.”