Proposed HB 1578 Will Affect Stop Loss Market in Texas

A stop loss carrier sent this to us this morning which bears worth watching:

HB 1578 has been introduced in the Texas Legislature.  The Bill would affect stop loss and reinsurance policies.  Under the Bill reinsurance would be prohibited and stop loss insurance required to cover a self-funded plan.  All stop loss policies must be approved by the Commissioner.  An individual stop loss policy must have a deductible between $5000 and $100,000 or it will not be approved. 


Editor’s Note: This is another example of government interferance in private enterprise. It appears that the State of Texas wants to become an insurer and will prohibit the private sector from reinsuring medical stop loss policies. Specific stop loss limit of $100,000 will significantly increase costs for larger self-funded groups that currently have their specific level at $250,000 or higher.  And, for those groups, it would not be actuarial sound to limit their exposure to $100,000.