D.C. likely to effectively ban self-insurance for small businesses, pushing them to health exchange
Small businesses in the District will essentially be banned from having self-funded health insurance plans and pushed to purchase coverage from D.C. Health Link, the city's health exchange, if a measure before the D.C. Council passes next week.
That's because the legislation includes rules that would render stop-loss coverage — which is insurance for self-funded plans that kicks in when unexpectedly high medical claims occur — essentially useless for groups with fewer than 50 employees, said D.C. Councilwoman Yvette Alexander.
That would leave the city's exchange as their only other option to purchase health plans, and it's a move Alexander, the council's Health Committee chairwoman, says is heavy handed. The issue pits the District's health exchange efforts against a small business owner's right to purchase the same insurance products many large employers choose.
But supporters of the measure say they are trying to close a loophole that self-funded plans create when it comes to the Affordable Care Act's requirements for minimum essential benefits. They also want to prevent insurers that sell stop-loss coverage from pulling small businesses with healthy workforces away from the District's exchange.
"Without limitations, as employees age or become ill, the stop-loss carriers will terminate coverage and force those small businesses back into the marketplace, thereby raising premiums," D.C.'s Department of Insurance, Securities and Banking said in a statement. "The legislation also reduces the risk of D.C. Health Link becoming a high-risk pool."
You might also like
The U.S. Women’s Chamber of Commerce announced today a critical challenge to the President, Small Business Administration (SBA) and Congress to act immediately to bring real accountability in contracting to women-owned
According to Expert Market, the states with the most female-owned businesses are: Washington DC (34.5%), Maryland (32.6%), New Mexico (31.7%), Hawaii (31%), Georgia (30.9%). There are more female entrepreneurs in America