SELF-INSURANCE PROTECTION ACT
Mr. SCOTT of Virginia. Mr. Speaker, H.R. 1304, the Self-Insurance Protection Act, purports to protect stop-loss insurers from being regulated at the Federal level. It appears that we are considering a bill that is a solution in search of a problem.
I am not opposed to stop-loss insurance or the purpose of stop-loss insurance. It can be helpful in shielding employers from unforeseen risks in many instances when they choose to self-insure and want to protect themselves from unexpected and unusually high expenses.
Now, while many self-funded plans, in conjunction with the purchased stop-loss, look like a traditional fully insured plan, stop-loss coverage itself is not regulated at the Federal level. There is no indication or suggestion that the administration would seek to regulate stop-loss insurance, so the bill prohibits Federal regulation of stop-loss insurance.
The Federal Government does not regulate stop-loss insurance today, and doesn't look like it is going to seek to regulate self-insurance in the foreseeable future, so it is difficult to ascertain exactly what the purpose of the bill is.
But employers, particularly small ones, do face risks when self-insuring. I think it is important that we ensure that employers are aware of the risks and protect them and their employees when appropriate. They can incur tremendous losses if the employee incurs a serious injury or illness.
Employees are also at risk of receiving fewer benefits because many consumer protections do not apply to self-funded plans.
Employers are legally prohibited from discriminating on the basis of health status, but stop-loss insurers are not. Many policies have provisions that will trigger immediate, even retroactive, increased premiums when the stop-loss insurer receives greater-than-expected claims.
To date, many States have taken action to regulate stop-loss insurance in order to protect both businesses and workers. Some have required a minimum, what is called attachment point. That is when the stop-loss insurance kicks in. Others have restricted the selling of stop-loss insurance with certain small group markets.
New York prohibits the sale of stop-loss insurance to small employers, and prohibits employers from serving as their own third-party administrators. North Carolina has chosen to regulate stop-loss insurance as if it were normal health insurance, holding stop-loss insurance to the same standards of others in the market.
Now, if States want to ban stop-loss insurance altogether, that should be a State prerogative. States have taken these steps because, frankly, self-insuring and stop-loss insurance come with greater risks to both employers and employees. Stop-loss plans place annual limits on services. Some place annual limits on services or exclude coverage for certain benefits, such as prescription drugs.
Furthermore, the renewal of stop-loss insurance is not guaranteed, so if an employer suddenly has high medical costs, the stop-loss insurer can refuse to renew or charge so much that it is no longer affordable.
In the committee markup, the gentlewoman from Oregon (Ms. Bonamici) offered a clarifying amendment to ensure that this legislation would not be construed to restrict the ability of States to regulate stop-loss insurance. Chairwoman Foxx agreed to include such clarifying language in the committee report, agreeing with the intent of that amendment. Based on that understanding, that amendment was withdrawn.
The clarifying language is in the report, and that clarification is vital to ensure that there is nothing in the bill that incorrectly can be interpreted as to preempt or restrict a State's ability to regulate stop-loss insurance as they see fit, or otherwise restrict effective oversight and regulation of these policies at the State level. I appreciate the majority's willingness to work with us on the inclusion of that clarifying language.
Mr. Speaker, while I don't intend to oppose the legislation, I would note that it seems to be a distraction from the Republicans' recent failed attempt to repeal the Affordable Care Act. After 7 years of complaints, the Republicans offered an alternative which was demonstrably worse than the Affordable Care Act on every measure; more people uninsured, higher prices, and the policy you end up getting is worse.
Democrats will continue to resist any attempts to move this country backwards by making health insurance less accessible and less affordable to American families.