U.S. Senators Olympia J. Snowe (R-Maine), Michael B. Enzi (R-Wyoming), and Tom A. Coburn, M.D. (R-Oklahoma) wrote a letter expressing their concerns that a potential regulation being considered by the Obama Administration could force small businesses into more regulated plans and cause millions of Americans to lose their existing health insurance. The letter called on the Administration to provide an explanation for recently submitting a Request for Information (RFI) regarding stop loss insurance, which is often the first step in issuing a new regulation. In a letter to the Secretaries of the U.S. Departments of Treasury, Labor, and Health and Human Services, the departments that jointly issued the RFI, the senators expressed their concern that materials in the RFI could be the precursor to a regulation affecting small businesses' ability to run their own self-insured health plans.
Stop Loss Insurance works as a backstop for self-insured plans and is critical for small businesses that may face fluctuations in costs. The questions and background information included in the RFI suggest that the Administration may be considering actions to limit stop loss coverage for small and medium businesses, an action which is outside the limits of the Administration's existing authority. Placing limits on stop loss coverage could force business to switch from more flexible self-insured plans into more regulated plans subject to the mandates included in the Patient Protection and Affordable Care Act -- and force millions of Americans out of their existing plans, and into the new health exchanges.
In their letter, Senators Snowe, Enzi, and Coburn said:
"Because stop loss insurance acts as a backstop to cover extremely high, unexpected costs associated with an individual in a health plan, or to help a business cover higher than expected aggregate plan costs, this kind of insurance is critical for operating a predictable, affordable self-insured health plan. Any possible disruption of these services is of paramount concern to lawmakers, employers, and tens of millions of plan participants."
The senators requested Secretaries Timothy Geithner, Hilda Solis, and Kathleen Sebelius to explain the statuary authority they are asserting in pursuing a potential change in federal rules relating to stop loss insurance, provide any departmental communications regarding efforts to reduce the number of individuals enrolled in self-insured plans, and an analysis of the impact such a regulation would have on small businesses.