Self-Insurance Protection Act
- Bill Number
- H.R. 2571
- Origin Chamber
- House
- Congress
- 119th Congress, Session 1
- Policy Area
- Health
- Status
- Introduced
- Latest Action
- 2025-12-15: Placed on the Union Calendar, Calendar No. 356.
- Last Updated
- 2026-06-11T05:06:22Z
AI-Generated Summary
Purpose of the Legislation
The Self-Insurance Protection Act (H.R. 2571) aims to protect employers who self-fund employee health benefit plans by clarifying the role of stop-loss insurance—a type of coverage that reimburses employers for unexpectedly high medical claims—and ensuring it remains available without interference from state regulations. It emphasizes that self-funding allows employers to manage health benefits using their own funds, while stop-loss acts as a safeguard against financial risks without directly insuring employees or providers.
Key Provisions
- Findings Section: Outlines congressional recognition that:
- Employers can self-fund health plans using company assets or purchase fully insured coverage.
- Stop-loss insurance protects employers (not the plan or employees) from catastrophic claims exceeding projections.
- Self-funded plans are governed by the federal Employee Retirement Income Security Act (ERISA), while states regulate stop-loss insurance terms and availability.
- Both small and large employers need access to stop-loss, with reasonable state oversight.
- Exclusion from Health Insurance Definition (Section 3): Amends ERISA to exclude stop-loss policies from the definition of "health insurance coverage" when obtained by self-insured group health plans or their sponsors. This applies to policies that reimburse for claims losses above a set threshold.
- Preemption of State Laws (Section 4): Adds a provision to ERISA stating that federal law overrides any state laws that block group health plans from using insurance to cover excess or unexpected claims losses.
Significant Changes to Existing Law
- Clarification of Stop-Loss Status: Previously, stop-loss insurance could sometimes be treated as health insurance under ERISA, subjecting it to federal rules for group health plans. The bill explicitly excludes qualifying stop-loss from this category, treating it as a separate financial protection tool for employers.
- Enhanced Federal Preemption: ERISA already limits state interference in employee benefit plans, but this adds specific preemption for state restrictions on stop-loss, ensuring employers can access it nationwide without varying state barriers. (Preemption means federal law takes priority over conflicting state laws.)
Potential Impacts
- On Government Agencies: The Department of Labor (which enforces ERISA) may see increased oversight of self-insured plans but reduced state-federal conflicts. No direct impact on other federal agencies or international relations.
- On Citizens (Employees): Employees in self-funded plans may benefit indirectly from more stable employer-sponsored health coverage, as stop-loss helps prevent plan disruptions from high claims. However, it does not change employee benefits or provider payments directly.
- On Employers and Plans: Small and large employers gain easier access to stop-loss, potentially lowering financial risks and costs for self-funding, which could encourage more self-insured arrangements (common for cost control).
- On States and Insurers: States lose some authority to restrict stop-loss availability or terms, which might lead to more uniform national access but could challenge state insurance regulators. Stop-loss insurers may see expanded markets.
Main Stakeholders Affected
- Employers (Plan Sponsors): Primary beneficiaries, especially small businesses that self-fund to avoid state-mandated insurance rules.
- Employees and Plan Participants: Indirectly affected through the stability of employer-provided health benefits.
- Stop-Loss Insurance Providers: Gain clearer legal footing and potentially broader sales opportunities.
- State Insurance Regulators: Face reduced control over stop-loss policies, shifting more regulation to the federal level.
- Health Insurance Companies: Minimal direct impact, but could face competition if more employers opt for self-funding with stop-loss.
Notable Legal, Constitutional, or Political Implications
- Legal Implications: Strengthens ERISA's framework by resolving ambiguities around stop-loss, potentially reducing litigation over whether it qualifies as prohibited health insurance. It promotes consistency in how self-insured plans operate across states.
- Constitutional Implications: Relies on ERISA's established broad preemption authority under the U.S. Constitution's Supremacy Clause (which makes federal law supreme over state law). This could invite challenges if states argue it oversteps into their traditional role in regulating insurance, but ERISA preemption has been upheld by courts in similar cases.
- Political Implications: Supports business interests in flexible health plan options, aligning with efforts to reduce regulatory burdens on employers. It may spark debate over federal versus state powers in health care, particularly for small employers seeking affordable alternatives to traditional insurance.
This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.
Sponsor
Cosponsors (2)
Rep. Messmer, Mark B. [R-IN-8], Rep. Grothman, Glenn [R-WI-6]
Recent Actions
- 2025-12-15: Placed on the Union Calendar, Calendar No. 356.
- 2025-12-15: Reported (Amended) by the Committee on Education and Workforce. H. Rept. 119-408.
- 2025-12-15: Reported (Amended) by the Committee on Education and Workforce. H. Rept. 119-408.
- 2025-06-25: Ordered to be Reported (Amended) by the Yeas and Nays: 21 - 15.
- 2025-06-25: Committee Consideration and Mark-up Session Held
- 2025-04-01: Referred to the House Committee on Education and Workforce.
- 2025-04-01: Introduced in House
- 2025-04-01: Introduced in House
Bill Versions
- Self-Insurance Protection Act — issued 2025-04-01 — PDF (4 pages)
- Self-Insurance Protection Act — issued 2025-12-15 — PDF (6 pages)