Dive Brief:
- Maryland lawmakers are considering legislation to make it more expensive for businesses to self-fund rather than buy traditional health insurance plans—a move that would be a particular hit to small businesses.
- The bill (SB703) would change the point at which stop-loss insurance takes over from $10,000 to $40,000, in the event that an employee's health expenses are far higher than anticipated. The bill is scheduled to be heard this week before the state's Senate Finance Committee.
- While self-funded plans used to only be common among large companies, they have become an increasingly-popular route among small companies amid rising costs for traditional plans and increases in regulations on fully-funded plans, reports the Baltimore Business Journal.
Dive Insight:
One of the bill's proponents is the state's largest insurer. CareFirst BlueCross BlueShield has voiced concern that self-insured plans will primarily appeal to small businesses with healthy employees, leaving a disproportionate number of companies with sicker employees in the small group market.
Others simply see the bill as an attempt by CareFirst to protect its market share. Other payers, including Cigna, are publicly opposing the bill.
"Stop loss is an insurance product that currently serves Maryland employers well and we think legislators should be looking for ways to encourage additional employer and consumer choice for affordable healthcare, not regulations that make choice and affordability even harder to achieve," Julia Huggins, president of Cigna in Maryland, wrote in a prepared statement.