Self-Insurance Protection Act

H.R. 2571 would amend federal law to exclude stop-loss insurance from the definition of health insurance coverage. Stop-loss insurance is a financial protection tool that self-insured employers purchase to protect themselves against unexpectedly high or catastrophic employee health claims. Some employers choose to self-fund their health plans by paying employee medical costs directly rather than purchasing traditional insurance from an insurance company. When these employers face potentially large claims, they buy stop-loss insurance to limit their financial risk. Currently, while employer health plans are regulated at the federal level under the Employee Retirement Income Security Act, stop-loss insurance is regulated by individual states. Some states have restricted or prohibited stop-loss coverage, particularly for smaller employers. This bill would clarify that federal law takes precedence and prevent states from making stop-loss insurance inaccessible to employers. Supporters argue this would help small and large employers maintain the flexibility to offer self-insured health plans to their employees while managing financial risk. The bill has passed committee review and is eligible for a floor vote, though it would still need Senate approval and presidential signature to become law.