Stop Loss Policies Containing Certain Provisions Must Be Amended by September 1, 2015, Connecticut Insurance Commissioner Says
Jul 9, 2015
In Bulletin(s) HC-103 and PC-79 issued yesterday, July 8, 2015, Connecticut Insurance Commissioner Katharine Wade advised all insurance companies and others doing business in the State of Connecticut on certain provisions that will not be approved in a stop loss policy.
To view the Bulletin(s), click here.
Stop loss insurance coverage is also known as excess reimbursement insurance or excess insurance coverage.
“Recent stop loss filings have included provisions that are common in health insurance policies, but inappropriate for stop loss policies,” Commissioner Wade wrote. “A key issue is that stop loss carriers are making individual claims determinations that may be different than those made in the underlying group health policy. A self-funded employer remains legally responsible to pay the claims under the group health plan, but may be financially unable to fulfill its fiduciary obligations due to the limitations found in the stop loss policy.”
Specifying that yesterday’s Bulletins should be read in conjunction with Bulletin HC-95 and PC-75 dated March 17, 2014, Commissioner Wade explained that stop loss policies will not be approved if they contain provisions relating to the following:
- Claims denials that the employer is legally obligated to pay
- Differences in attachment points based on the health status of enrollees
- “Medical necessity” determinations
- “Usual or customary” determinations
- “Experimental/investigational” determinations
- Case management requirements
- Annual dollar limitations in coverage
- Mandated provider networks benefit incentives for enrollees
- Requirements that enrollees be actively at work
- Right to examine enrollees
- Rescission for reasons other than fraud or intentional misrepresentation
- Early termination at the discretion of the carrier other than in accordance with cancellation and nonrenewal laws applicable to these policies
- Terms or conditions that are misleading, deceptive or contrary to the public interest
- Mid-term rate increases at the discretion of the carrier
- Any conflict with state law
- Other provisions that are deemed to be health insurance and inappropriate for stop loss
Commissioner Wade requested that any carrier that has had filings approved that contain any of the provisions outlined in this Bulletin must file amendatory language to correct the filings no later than September 1, 2015.
Insurers shall not use previously approved forms containing such provisions for policies issued or renewed on or after January 1, 2016.
All policy form filings should be made through the System for Electronic Rate and Form Filings (SERFF).
A stop loss insurance policy insures the employer or its group health plan not the enrollees covered by the plan. The policy may be issued by either a property and casualty insurer or an accident and health insurer and is not regulated as group health insurance.
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