DOL Incorporates SIIA Input in Report on Self-Insured Group Health Plans
March 31, 2011 – A report published yesterday by the U.S. Department of Labor focused on self-insured group health plans incorporates key input provided by the Self-Insurance Institute of America, Inc. (SIIA). DOL officials had consulted with SIIA representatives on multiple occasions as part of their research for the report.
“We are pleased to see that our proactive effort to educate the DOL regarding self-insured health plans has resulted in a reasonably objective report,” said SIIA Chief Operating Officer Mike Ferguson.
Most importantly, the DOL report repeatedly acknowledges the limitations on making meaningful general comments regarding the financial position of self-insured group health plans based on information extracted from 5500 Forms.
SIIA helped educate DOL researchers that these filings do not provide the type of information necessary to make such judgments. Moreover, simply looking at the assets contained in a trust does not take into account the financial strength of the underlying plan sponsor.
“Our effort to educate the DOL that 5500s are not a meaningful nor accurate way to analyze self-funded plans was successful as clearly stated in the report,” said Ferguson.
While an appendix to the report contains some statistical financial analysis, the report declined to state any overarching conclusions. It is SIIA’s position that self-insured employers are not any more likely to encounter difficulties in funding their plans than employers which purchase traditional health insurance. This position is undisputed by the DOL.
On a related note, the report acknowledges that it underestimates the size of the self-insurance marketplace due to the fact they were limited to looking at data contained in the 5500 forms only. SIIA provided DOL researchers more comprehensive data demonstrating the market is more than three times as large as described in the report.
SIIA also corrected an early DOL belief that plans which retain stop-loss insurance are “partially self-insured,” which is demonstrated by the fact that this term is not included in the report despite references by DOL officials during prior discussions with SIIA.
The DOL does incorporate the term “mixed insured plans” within the report when describing a variety of benefit funding arrangements (health, dental & disability), but a reading of the underlying definition shows that the DOL is not confusing stop-loss insurance with health insurance, which SIIA cautioned against.
This report is mandated by the Patient Protection and Affordable Care Act and the DOL is required to update it each year. The full report can be accessed on-line through the members’ only section of the SIIA web site at www.siia.org.
A separate PPACA-mandated report comparing self-insured health plans with fully-insured health plans is expected to be published soon by the U.S. Department of Health & Human Services. SIIA has provided input to HHS officials regarding this report and will comment on the findings when it is published.
SIIA is national trade association than represents companies involved in the self-insurance/alternative risk transfer marketplace. Additional information about the association can be accessed on-line at www.siia.org.