Rep. Onder’s Self-Insurance Protection Act Passes the House

Contact: Brooke Morgan (Washington, D.C.) - Tonight, the House passed H.R. 6703, the Lower Health Care Premiums for All Americans Act, which includes Congressman Bob Onder's bill, H.R. 2571, the Self-Insurance Protection Act. This legislation ensures that employers who choose to self-insure retain access to a critical financial tool-stop-loss insurance.

"Americans deserve autonomy in their health coverage decisions, and small businesses should have the flexibility to choose a health plan that best meets the needs of their employees. As a physician, I've seen firsthand how greater competition and choice can drive down costs. The Self-Insurance Protection Act ensures that businesses, large and small, can provide the right health care coverage for their workers without unnecessary government interference," said Congressman Onder.

"At a time when health care costs are on the rise, we need to give businesses more tools to control their costs, not fewer. Unfortunately, Democrat-led states are intent on saddling self-insured health plans that use reinsurance to insulate themselves from unexpected high claims with more regulations by subjecting them to state health insurance law. This legislation confirms the obvious - reinsurance is different from health insurance and should not be regulated as such. Millions of Americans depend on self-insured employer-sponsored health plans. The Self-Insurance Protection Act will defend their access to high quality and affordable health care," said Education and Workforce Committee Chairman, Rep. Walberg.

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Link to the full bill text for H.R. 2571 HERE

Link to the full bill text for H.R.6703 HERE

Background Information

Many employers choose to self-insure by covering their employees' medical costs directly-either by paying providers or reimbursing employees as claims arise. In many cases, self-insured employers work with third-party administrators to manage provider networks and claims processing.

To manage financial risk, many self-insured employers rely on stop-loss insurance, which provides protection against unexpectedly high or catastrophic medical claims. Stop-loss coverage is a critical tool that enables employers, particularly small and mid-sized businesses, to offer health benefits while maintaining financial stability.

Despite its importance, stop-loss insurance has faced increasing scrutiny at the state level. New York currently prohibits stop-loss coverage for businesses with fewer than 100 employees, and other states have considered similar restrictions. While stop-loss insurance has traditionally been regulated by states and not at the federal level, the Obama administration signaled interest in redefining certain stop-loss policies as traditional health insurance. In 2014, the Department of Labor issued guidance stating that state laws regulating stop-loss insurance would not be preempted by ERISA, opening the door for states to restrict or prohibit its use.

H.R. 2571, the Self-Insurance Protection Act, amends the Employee Retirement Income Security Act of 1974 (ERISA) to:

• Clarify that federal regulators may not classify stop-loss insurance as traditional health insurance; and
• Affirm that ERISA preempts state laws that attempt to block self-insurance by regulating or prohibiting stop-loss coverage.

This legislation ensures that businesses, especially small employers, retain the flexibility to offer health coverage without unnecessary government interference.