Self-Insurance Institute of America steps up opposition to Calif. stop-loss bill

SACRAMENTO, Calif.—The Self-Insurance Institute of America Inc. is stepping up opposition to proposed California legislation that would prohibit the sale of stop-loss policies to small employers with specific attachment points below $95,000.

As amended April 9, the proposed bill, S.B. 1431, also would prohibit aggregate stop-loss attachment points below the greater of $19,000 times the total number of employees and dependents, 120% of expected claims or $95,000.

“This would reduce the ability of smaller employers to provide sound, valuable health plans for their employees under federal ERISA protection,” said Mike Ferguson, SIIA's chief operating officer, in a statement.

In addition to the restrictions on stop-loss attachment points, the legislation contains language that “erroneously refers to stop-loss insurance carriers providing ‘coverage’ to individual employees and dependents,” according to SIIA. “Stop-loss insurance is not health insurance covering individuals, but reimburses the employee plan for losses above defined levels,” SIIA’s statement said.

A hearing on S.B. 1431 has been scheduled for April 24 in the Senate Health Committee.