Members of the Rhode Island House of Representatives met on May 1, 2013 to discuss H.B. 5459, the Stop-Loss Insurance Act (the “Act”), which was introduced on February 14, 2013. The Act proposes to place further restrictions on the use of stop-loss insurance by employers who self-insure their employee benefit health plans. The latest version of the Act, introduced on April 23, 2103, establishes minimum attachment points for claims incurred of $20,000 per individual and in aggregate of 120% of expected claims. As previously discussed here, the prior version had individual attachment points of $60,000 per individual and in aggregate of 130% of expected claims. The Act was referred to the Rhode Island Senate Commerce Committee on May 2, 2013 for further deliberation.
Rhode Island is one of five states to introduce legislation regulating the sales of stop-loss insurance this year. California, Colorado, Minnesota, and Utah have similar bills pending. Third party administrators, producers and stop-loss insurers should be aware higher attachment points may be soon required in these states and should closely monitor developments in other states where they offer stop loss insurance in connection with self-insured plans.