H.R. 2571 — Self-Insurance Protection Act

This section sets forth six congressional findings regarding employer-sponsored self-funded health benefit plans, stop-loss insurance as a risk management tool against catastrophic claims, regulation of such plans under the Employee Retirement Income Security Act of 1974, and the need for states to reasonably regulate stop-loss insurance availability for both small and large employers.

This section sets forth congressional findings on employer-sponsored health benefit plans, including the use of self-funding arrangements and stop-loss insurance to protect against catastrophic claims losses. The findings note that such plans are regulated under the Employee Retirement Income Security Act of 1974 while states regulate the terms and availability of stop-loss coverage purchased by employers.

This section excludes stop-loss insurance obtained by a self-insured group health plan (or its sponsor) from the definition of health insurance coverage under ERISA. (Stop-loss insurance reimburses self-insured plans for participant claims exceeding a predetermined attachment point; thus, such policies are not subject to ERISA Part 7 requirements applicable to health insurance coverage, such as ACA market reforms.)

This section excludes stop-loss insurance obtained by a self-insured group health plan (or its sponsor) from the definition of health insurance coverage under ERISA. (Stop-loss insurance reimburses self-insured plans for participant claims exceeding a predetermined attachment point; thus, such policies are not subject to ERISA Part 7 requirements applicable to health insurance coverage, such as ACA market reforms.)

This section amends ERISA §514(b)—which provides exceptions to ERISA's general preemption of state laws relating to employee benefit plans—by adding paragraph (10), under which ERISA preempts state laws that prevent group health plans from insuring against the risk of excess or unexpected health plan claims losses. (Thus, self-insured ERISA group health plans may purchase stop-loss insurance notwithstanding state restrictions or prohibitions.)

This section amends ERISA §514(b)—which provides exceptions to ERISA's general preemption of state laws relating to employee benefit plans—by adding paragraph (10), under which ERISA preempts state laws that prevent group health plans from insuring against the risk of excess or unexpected health plan claims losses. (Thus, self-insured ERISA group health plans may purchase stop-loss insurance notwithstanding state restrictions or prohibitions.)