Harvard Pilgrim Health Care says a type of business insurance being offered by Aetna is luring companies with younger, healthier workers away from the Affordable Care Act marketplace, leaving others to provide small-group coverage to companies with older and less healthy employees.

In a public meeting before the Maine Bureau of Insurance on Thursday, Harvard Pilgrim and Community Health Options argued that the rules governing “stop loss” plans such as the one Aetna is offering are outdated and threaten to implode the ACA-compliant small-group market in Maine, which currently covers about 100,000 peopled employed by small businesses. Under the current rules, insurers can offer a replacement for small-group insurance that allows them to cherry-pick the businesses they want to cover, thus violating the spirit of the ACA.

If too many small businesses switched to such plans, it would drive up prices for ACA coverage, Harvard Pilgrim and Community Health Options said.

“We felt we had an obligation to place this issue in front of a regulator,” said Steven Larrabee, senior government affairs specialist at Harvard Pilgrim. “We think there could be unintended consequences from this new practice.”

However, supporters of the existing rules, including Aetna and UnitedHealthcare, said changing them could result in fewer Mainers with employee-sponsored health insurance.

Maine Superintendent of Insurance Eric Cioppa asked the insurers Thursday to submit detailed written opinions on the issue, and said he plans to hold a follow-up meeting toward the end of the month. Then the bureau will decide whether to impose new rules.

Stop-loss insurance is designed for employers that self-fund their employee health insurance plans. It covers catastrophic losses to the employer in the event that employee medical claims exceed a contractually designated threshold, known as an “attachment point.” For stop-loss insurance, an attachment point is akin to a deductible.

Aetna recently began offering a stop-loss plan in Maine with an attachment point of $20,000 per claim, the minimum allowed based on state rules adopted more than two decades ago, in 1995. Critics argue that with an attachment point that low, there is very little risk to the self-insured business, because it would not have to cover individual employee medical claims in excess of $20,000.

Harvard Pilgrim representatives said it makes the stop-loss plan nearly indistinguishable from a standard small-group insurance plan, which is designed for businesses with up to 100 employees. The only difference is that by calling it stop-loss insurance and offering it to ostensibly self-insured employers, it isn’t subject to the ACA rule that says the insurer can’t turn away any applicants due to the age or health of their employees.

If too many small businesses with younger, healthier workers switched to the Aetna plan, it would leave primarily older and sicker workers in the ACA small group risk pool and drive up prices.

They want the bureau to increase the minimum attachment point closer to $30,000 and set annual increases based on medical cost inflation, which would increase the amount of risk to the employer and make the self-insured route less appealing. They also would like the bureau to make it illegal in Maine for insurers to offer lower prices on stop-loss insurance to small businesses with younger and healthier employees.


Harvard Pilgrim told the bureau in a written statement that it already is losing ACA small-group members to Aetna’s stop-loss plan, and that there is a pattern of businesses with healthier workers leaving the ACA small-group marketplace.

“While the choice of leaving (Harvard Pilgrim) does not itself set off alarms, the number of employers that sought to leave the fully-insured market for self-insurance did and still concerns us,” the company said. “At the time, roughly 21 groups left (Harvard Pilgrim) for a self-insured product offering within a short three-month period. Since then, that number has grown to roughly 44 groups covering more than 1,600 members, and there is a material difference in the health of these groups seeking to self-insure.”

The company said that according to its analysis, the relative risk profile of the groups that left Harvard Pilgrim in 2017 is roughly 14 percent healthier than the groups that remained.

On Thursday, the bureau asked Maine’s major health insurers for their opinions on the proposed changes to stop-loss insurance rules. Both Harvard Pilgrim and Community Health said they favor imposing a minimum attachment point to at least $27,500, as neighboring New Hampshire recently did.

However, Aetna and UnitedHealthcare, neither of which participates in the ACA in Maine, disagreed. UnitedHealthcare even suggested that the attachment point in Maine should be lowered to $15,000.

Aetna representatives said increasing the minimum attachment point would result in more small businesses in Maine dropping their employee insurance coverage, leaving those workers to fend for themselves on the individual insurance market.

Cioppa said the bureau will attempt to render a decision that strikes a balance between not discouraging small businesses in Maine from offering employee health insurance, and not sending the ACA small-group market into a “death spiral.”

“I want to be careful how we do this, because it’s a tough issue,” he said.

J. Craig Anderson can be contacted at 791-6390 or at:

[email protected]

Twitter: jcraiganderson

This story was updated at 10 a.m. Nov. 15 to clarify that the $20,000 attachment point is per claim.

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