On April 22, the Colorado House of Representatives passed legislation regulating stop-loss through minimum attachment points, and requiring stop-loss insurers to give the commissioner information about their self-insuring clients with 100 and fewer full-time equivalents. The bill also would give the insurance commissioner authority to unilaterally raise minimum stop-loss attachment points based on medical price inflation. The bill was reported to the Colorado Senate’s Health and Human Services committee on the same day.
The legislation would focus regulatory scrutiny on stop-loss insurers when they issue policies to smaller companies. Stop-loss insurers would have to report on all policies wrote for clients with 100 and fewer FTEs: the number of covered lives for each group, the mean and median attachment points for each group, and the source of prior coverage for each group, including whether they migrated lives from the Colorado insurance exchange, which is supposed to be operational starting in 2014 under health reform.
The specific attachment point would be $20,000 and the aggregate attachment would be no less than 120 percent of expected claims or $20,000. And these limits would apply only to companies with 50 or fewer full-time employees. Here’s a link to the amended bill.
These levels soften the $30,000, or 120-percent limits in the unamended version. The old version also had $4,000 times the number of covered lives as a possible limit.
In the bill that’s moving forward, policies could not exclude any employee or dependent from the stop-loss insurance coverage based on claims history (thus, no lasering). Policies could not vary the specific attachment point by individual.
Finally, the insurance commissioner would be empowered to change attachment point requirements based on medical price-index data.
For more information, visit hr.complianceexpert.com.