31 Pa. Code § 89.472 - Filing requirements for stop-loss policies

(a) Section 354 of the act (40 P. S. § 477b), authorizes the Department to review and approve accident and health policies filed by companies. A stop-loss policy submitted to the Department for approval shall satisfy the following conditions:

(1) The stop-loss policy shall be issued to, and insure, the sponsor of the plan, or the plan itself, not the employes, members or participants.

(2) Payments by the insurer shall be made to the sponsor of the plan or the plan itself, not the employes, members, participants or providers.

(3) The individual stop-loss amount; that is, retention or attachment point per claimant, shall be at least $10,000; the aggregate stop-loss amount for the plan shall be, at a minimum, $100,000 per calendar year.

(4) The stop-loss policy shall contain a provision that the plan's or the plan sponsor's bankruptcy or insolvency will not relieve the stop-loss carrier from its obligation to pay claims under the stop-loss policy.

(5) In addition to the stop-loss policy filed with the Department for approval, filings shall contain a separate document certifying that each of the four requirements listed in paragraphs (1)-(4) have been met.

(b) Stop-loss is not equivalent to reinsurance; reinsurance only relates to transactions between commercial insurers. An entity purporting to cover self-insured plans will be treated as a stop-loss insurer and will be subject to insurance laws and regulations of the Commonwealth relating thereto and penalties for violations thereof.

(c) If the original self-funded employe benefit plan is exempt from providing State mandated health benefits; that is, if the underlying plan is ERISA exempt, the stop-loss policy should not provide more benefits than the original policy, absent an agreement to the contrary between the employer and the stop-loss insurer. If the stop-loss policy covers excess benefits on an underlying policy or plan which is not ERISA exempt and thus provides State mandated benefits, the stop-loss policy shall include State mandated benefits.

Notes

31 Pa. Code § 89.472

The provisions of this § 89.472 adopted September 25, 1992, effective 9/26/1992, 22 Pa.B. 4785.