The introduction of the Self-Insurance Protection Act (SIPA) in November

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1 SIIA Puts Self-Insurance Industry on the Offense in Washington, DC Association Leverages Member Involvement to Expand Political Influence by David Kirby This is the first of a series of periodical articles highlighting SIIA s government relations work in Washington, DC, particularly involvement by association members. To learn how you can get involved, please contact SIIA Government Relations Coordinator Kevin McKenney at kmckenney@siia.org. The introduction of the Self-Insurance Protection Act (SIPA) in November of last year was the latest example of how the Self-Insurance Institute of America, Inc. (SIIA) continues to expand its political influence on Capitol Hill. This industry defense effort is ongoing with an integrated strategy involving the association s team of professional lobbyists along with an increasing number of SIIA members who are volunteering their time to help educate key members of Congress about the importance of self-insurance. Another critical part of this strategy is that the association s political action committee (SIPAC) has focused its contribution allocations to directly support SIPA lobbying activities. The SIPAC contributions budget continues to grow, and this year will represent an all-time high. SIIA has been alert to legislative/regulatory efforts at the state and federal levels that would restrict the availability of stop-loss insurance for smaller and midsized employers. With regard to a potential federal threat, it is believed that the Administration is considering a rule-making process that would redefine stop-loss insurance as health insurance coverage based on arbitrary attachment point levels. SIPA (H.R. 3463/S. 1735) is a two-page bill that would amend the definition of health insurance coverage under the Public Health Services Act (PHSA) and 36 March 2014 The Self-Insurer Self-Insurers Publishing Corp. All rights reserved.

2 parallel sections of ERISA and the Tax Code to clarify that this term does not include stop-loss insurance. It does not amend the Affordable Care Act (ACA). SIIA President & CEO Mike Ferguson encouraged lawmakers to support the legislation at a February 26 congressional hearing focused on the role of selfinsurance in the health care marketplace since the passage of the ACA. Ferguson clarified that SIIA is not advocating for repeal of the ACA. We ll leave it to other groups to debate the future of the law. Rather, our support for SIPA is intended to establish guardrails around a segment of the health care marketplace that is currently working. Joining Ferguson at the witness table was a SIIA member as well as the general manager of a self-insured public utility, whose participation was arranged by yet another SIIA member. During the hearing SIIA member Robert J. Melillo, National Vice President, Risk Financing Solutions of USI Insurance Services, and chairman of SIIA s Health Care Committee, briefed the subcommittee on the benefits of self-insurance to employers of all sizes. He cited two case studies of employers in Connecticut and Ohio that realized significant savings during the first few years of switching from traditional fullyinsured plans to self-insured plans with the use of stop-loss insurance. Beyond financial savings, Melillo said, Many plan sponsors that selfinsure begin investing in the health of employees by implementing programs that educate and incentify healthy habits among their employees with the result of addressing possible major health issues before they occur. Perspective by a public sector employer was provided by Wes Kelley, Executive Director of Columbia Power & Water Systems, Columbia, Tennessee, who told the Robert J. Melillo, National Vice President, Risk Financing Solutions of USI Insurance Services, and chairman of SIIA s Health Care Committee, briefs the subcommittee on February 26, Congressional panel that by switching to a self-insured plan in 1993, Enough money was saved in the first year of self-funding to establish a solid financial reserve that has continued to build to this day. He cited improved employee health benefits that are provided without the employees contributing to the cost. He said that self-funding has been successful for Columbia Power because of factors that perhaps most importantly include affordable stop-loss insurance that protects the financial solvency of the plan. Mr. Kelley s participation was arranged by SIIA member Bob Shupe, president of ESPinc in Brentwood, Tennessee. We hope to bring some reality to Congress on how the SIPA bill would protect self-insurers, Shupe said. It s especially important for SIIA members to serve as a conduit for self-insuring employers to make these connections to their Congressional representatives. While the congressional hearing was a high profile public event, SIIA lobbyists and members have been busy behind the scenes promoting the association s legislative agenda. During the same week of the hearing, multiple lobbying meetings were held with key House democrats, including Reps. John Barrow (D-GA), Ron Kind (D-WI) Tim Bishop (D-NY), John Yarmuth (D-KY), Adam Smith (D-WA) and Ed Perlmutter (D-Co), all members of the Energy & Commerce Committee, another committee of jurisdiction for SIPA. The meetings were organized by SIIA lobbyist Bart Stupak, who is a former member of Congress with close ties to the House Democratic caucus. Joining Stupak and Ferguson for the meetings was Horace Garfield, vice president of Transamerica Benefits and Chairman of the SIIA Government Relations Committee, and Jerry Castelloe, regional president of CoreSource and a SIIA board member. Given the importance of selfinsurance to hundreds of self-insured union health plans across the country, SIIA believes it makes sense to reach out specifically to congressional Democrats and labor officials in order to forge bipartisan support for SIPA. Self-Insurers Publishing Corp. All rights reserved. The Self-Insurer March

3 38 March 2014 The Self-Insurer Self-Insurers Publishing Corp. All rights reserved.

4 SIIA board member and CEO of Specialty Care Management Bob Clemente also traveled to DC that week to watch the hearing and participate in meetings with Rep. Phil Roe (R-TN) plus senior staff members of the Senate Finance and Health Committees. In addition to all of this DC activity, SIIA has been connecting its members with their elected representatives in their home states/districts. William Burke, President of HCC Insurance Holdings, Inc., the parent company of SIIA Member HCC Life Insurance Company, represented the Self-Insurance Political Action Committee (SIPAC) at a reception event for Congressman Gene Green (D-TX) in Houston. Rep. Green has been identified as a moderate House Democrat who may inclined to be a self-insurance advocate. During his conversation with Burke, Rep. Green noted that he is aware of many self-insured employers in his district. Another SIIA member executive who knows that stop-loss insurance restrictions would severely damage his industry, Michael Sullivan, President of HM Insurance Company, paid a call early in the SIPA campaign to Rep. Mike Doyle (D-PA), where he specifically noted the importance of stop-loss insurance to HM s self-insured corporate and union plans. Accompanying him to the meeting was a representative of the self-insuring Pittsburgh bricklayers union. This is absolutely the most important issue for SIIA at this time, Sullivan said. Our industry has never had as much federal and state encroachment on our business as in the last few years. Two members from the state of Washington teamed up to visit their Congressman. David Snodgrass, President and CEO of Healthcare Management Administrators of Bellevue and Michael Fry, Executive Vice President of the Benefits Division of Symetra, also in Bellevue, met with Rep. Adam Smith (D-WA) to express the importance of the self-insured marketplace. Commenting on the association s proactive approach, Snodgrass said no other source of political advocacy than SIIA would be able to so vigorously support the self-insurance industry. SIIA is increasingly filling a unique and highly important role and I think there s some real power there. Another advocacy strategy pursued by SIIA has been to mobilize large business and labor organizations to become active on self-insurance issues such as SIPA. Consistent with this objective, SIIA last year formed the Self- Insurance Defense Coalition (SIDC). The group includes the U.S. Chamber of Commerce, the National Association of Manufacturers, the Council of Insurance Agents and Brokers, the National Association of Wholesaler-Distributors, the National We re excited to announce the alignment of First Health and Cofinity, both now members of the Aetna family. Together, we can offer an expanded product suite of network solutions with simple implementation and administration. First Health and Cofinity provide: Access to more than 5,000 hospitals, over 90,000 ancillary facilities and over 1 million health care professional service locations nationally* Strong regional presence, primary and complementary national networks, supplemental network relationships, and non-network fee negotiations Competitive PPO network savings Collaborative customer service Multiple re-pricing options, including electronic data interchange (EDI) Ancillary products including medical management, the Cofinity Institutes of Excellence TM transplant program, and the Aetna Dental Administrators program For nearly 30 years First Health and Cofinity have worked extensively with employers, insurance carriers, third-party administrators and health plans to develop and deliver products. Our products consistently provide optimal cost and care outcomes for employers and their members. Quality, Value, Accessibility and Service Your National Choice for Network Solutions Please contact us at fhnmarketing@cvty.com for more information! *First Health network provider counts as of March 2013, First Health CPD database First Health Group. First Health is a brand name of First Health Group Corp., an affiliate of Aetna Life Insurance Company. Cofinity is a brand name of Aetna Inc. The services offered under the Cofinity brand name are offered by Cofinity, Inc. and/or other Aetna subsidiaries or Aetna contracted parties. Aetna is a brand name used for products and services provided by one or more of the Aetna group of subsidiary companies. Self-Insurers Publishing Corp. All rights reserved. The Self-Insurer March

5 Wes Kelley, Executive Director of Columbia Power & Water Systems, Columbia, TN giving his perspective on self-insurance on February 26, Retail Federation, the Heating, Air-Conditioning & Refrigeration Distributors International and the National Electrical Contractors Association. The coalition has issued a joint letter of support of SIPA, with individual members also writing to Congress. In a letter to Congressional leaders, R. Bruce Josten, Executive Vice President of Government Affairs of the U.S. Chamber of Commerce, swung the weight of the world s largest business federation solidly to the support of SIPA. He noted that SIPA would guarantee that employers would continue to be able to self-insure employee benefit plans because this clarification of the law will make certain that federal regulators cannot redefine stop-loss insurance as traditional health insurance. This integrated advocacy campaign is expected to further intensify and expand in the months ahead as SIIA plays the long game in working to defend the self-insurance industry. Calling all members! n David Kirby is an editorial contributor for the Self-Insurer Magazine. Do you aspire to be a published author? Do you have any stories or opinions on the self-insurance and alternative risk transfer industry that you would like to share with your peers? We would like to invite you to share your insight and submit an article to The Self-Insurer! SIIA s official magazine is distributed in a digital and print format to reach over 10,000 readers around the world. The Self-Insurer has been delivering information to the self-insurance/alternative risk transfer community since 1984 to self-funded employers, TPAs, MGUs, reinsurers, stoploss carriers, PBMs and other service providers. Articles or guideline inquiries can be submitted to Editor Gretchen Grote at ggrote@sipconline.net. The Self-Insurer also has advertising opportunities available. Please contact Shane Byars at sbyars@ sipconline.net for advertising information. 40 March 2014 The Self-Insurer Self-Insurers Publishing Corp. All rights reserved.