DOL Issues Guidance on Stop-Loss Insurance

In Technical Release No. 2014-01: Guidance on State Regulation of Stop-Loss Insurance, the U.S. Department of Labor indicates that:

"Under current law, employers and other sponsors of group health plans may either provide coverage through an insurance contract or instead, pay benefits directly, as claims occur. In general, private sector employment-based group health plans that self-insure are not subject to State health insurance laws, including coverage laws, rating policies, and certain other State consumer protections applicable to health insurance...Employers and other sponsors of self-insured group health plans, especially small employers, may face large fluctuations in claims, and they frequently seek to reduce this risk by purchasing stop-loss insurance."

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