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HB 156

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2025 Regular Session Introduced by Ocean Andrew and 27 co-sponsors

Expands small employers’ access to stop‑loss and related coverage by lowering the eligible‑employee threshold from fewer than 12 to fewer than 5 (5–11 eligible employees).

Assigned Chapter Number 172
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Bill Summary · HB 156

Summary — HB 156: Increase Access for Small Employers / Insurance

Status: Regular Message Sent to Senate
Introduced: August 15, 2025 (bill text and legislative action indicate introduction in 2025)
Primary subject areas: Insurance; Small business; Health coverage; Stop‑loss/catastrophic/reinsurance

Purpose / Intent

The bill’s primary purpose is to expand small employers’ ability to obtain stop‑loss, catastrophic, and reinsurance coverage by lowering the employer‑size threshold that governs when such coverage may be offered to small‑employer groups. The change is intended to increase access to risk‑transfer products (often used with level‑funded or self‑funded plans) for smaller employers.

Key provisions

  • Amends G.S. 58‑50‑130(a)(5) to change the employer‑size threshold used in stop‑loss/catastrophic/reinsurance rules:
    • Replaces the prior threshold of “fewer than 12 eligible employees” with “fewer than 5 eligible employees.” (Effect: insurers may now provide stop‑loss and related coverage to groups with 5 or more eligible employees; previously such coverage was restricted to larger groups.)
  • Retains existing prohibitions and minimum attachment points for stop‑loss policies:
    • Insurers may not issue stop‑loss that provides direct coverage of an individual’s health expenses.
    • Per‑individual annual attachment point must be at least $20,000 for plan years beginning in 2013; for later years this amount is indexed using the Consumer Price Index for Medical Services for All Urban Consumers for the South Region and rounded to the nearest $1,000 (index factor is July of prior year ÷ July 2012).
    • Aggregate annual attachment point must be at least the greater of (1) 120% of expected claims or (2) the indexed $20,000 benchmark (same indexing method).
  • Carve‑outs: the bill preserves insurer flexibility to provide incentives for programs tied to medical homes, outcome‑based reimbursement, screenings, etc.
  • Effective date / applicability: The act takes effect October 1, 2025, and applies to contracts issued, renewed, or amended on or after that date.

Who is affected

  • Small employers in North Carolina with 5–11 eligible employees are the primary beneficiaries because they would newly qualify to obtain stop‑loss/catastrophic/reinsurance coverage.
  • Insurers, stop‑loss carriers, and brokers will be affected operationally and may adjust product offerings, underwriting, and pricing.
  • Employees of small employers may see increased options for employer‑sponsored health arrangements (e.g., level‑funded/self‑funded plans) where stop‑loss is used.
  • Regulators (NC Department of Insurance) will oversee compliance under existing statutory requirements.

Potential impacts and considerations

  • Market effects: expanding access can enable more small employers to self‑insure or purchase level‑funded plans, potentially increasing competition and plan design flexibility for small groups.
  • Risk/price effects: carriers may tighten underwriting or price products to reflect higher risk in very small groups; stop‑loss pricing and attachment points remain regulatory guardrails.
  • Fiscal impact: no state fiscal changes are specified in the bill text; primary impacts are to private‑market insurance operations.

If you’d like, I can prepare a one‑page explainer for small employers or a short checklist for insurers and brokers describing operational steps to implement the statutory change.

Compiled from official sources — confirm details with the bill’s official record.

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