Groups defend small self-insured plans

By Allison Bell, BenefitsPro

November 14, 2013

U.S. Capitol (AP photo/Jacquelyn Martin)

Defenders of self-insured health plans testified on Capitol Hill today that the plans are tools for employers to get more control over benefits programs, not get-out-of-federal-health-regulation free cards.

The witnesses — including Robin Frick, a Madisonville, La., benefit plan administrator, who spoke on behalf of the National Association of Health Underwriters, and Michael Ferguson, the president of the Self-Insurance Institute of America, appeared at a hearing on self-insurance organized by the House Small Business Committee health subcommittee.

Some health policy watchers, including Linda Blumberg of the Urban Institute, who also testified at the hearing, have suggested that young, healthy small groups could use self-insurance simply to escape from Patient Protection and Affordable Care Act requirements, and that a flight toward self-insurance could destabilize the small-group health insurance market.

Frick told subcommittee members that most PPACA market protection rules will apply to self-insured groups as well as to insured groups.

“Further, some protections, like non-discrimination testing, already apply to all self-funded plans,” Frick said, according to a written version of his remarks posted on the committee website.

The U.S. Department of Health and Human Services is giving more flexibility to insured plans in some areas, such as employee participation requirements, than to self-insured plans, Frick said.

Ferguson gave a list of some of the many PPACA rules that apply to non-grandfathered self-insured plans, including the ban on annual and lifetime benefits limits, preventive services coverage requirements, benefits summary requirements, disclosure requirements, external claim denial review requirements, limits on waiting periods, and an emergency services coverage mandate.

Many of the PPACA provisions that exempt self-insured groups, such as PPACA health insurance rate rules, are irrelevant to self-insured groups, because the self-insured plan sponsors already have an obvious incentive to try to hold down administrative costs, Ferguson said.