Small Business Health Plan Bill Wins Broad Bipartisan Support
The legislature’s Insurance and Real Estate Committee this week overwhelmingly approved a bill offering healthcare insurance relief for struggling Connecticut small businesses.
The committee approved HB 6710, which provides a pathway for small employers to aggregate buying power and purchase large group health insurance, on a 9-3 bipartisan vote.
Co-chairs Sen. Jorge Cabrera (D-Hamden) and Rep. Kerry Wood (D-Rocky Hill) voted in favor, as did Sen. Tony Hwang (R-Fairfield), Rep. Cara Pavalock-D’Amato (R-Bristol), Rep. Jill Barry (D-Glastonbury), Rep. Tom Delnicki (R-South Windsor), Rep. Keith Denning (D-Wilton), Rep. Stephen Meskers (D-Greenwich), and Rep. Tammy Nuccio (R-Tolland).
Sen. Saud Anwar (D-South Windsor), Sen. Matt Lesser (D-Middletown), and Sen. Martha Marx (D-New London) voted against the bill, which is supported by dozens of small business organizations and nonprofit groups.
The bill provides nonprofit groups, trade associations, and their employer members two pathways to obtain more affordable, higher quality health insurance.
Small Business Solutions
First, the bill allows organizations that meet federal Department of Labor rules regarding association membership composition to aggregate their members and purchase a large group, fully insured ACA product directly from a licensed carrier.
Second, the bill allows associations with significant scale to offer a self-funded health benefit plan subject to extensive oversight by the Connecticut Insurance Department and in compliance with key provisions of the Affordable Care Act.
CBIA was among a host of trade associations and nonprofit organizations that supported the bill during the committee’s Feb. 21 public hearing.
Addressing small business health insurance costs and accessibility is one of CBIA’s 2023 Transform Connecticut policy solutions, supported by a bipartisan group of 84 lawmakers—almost half the General Assembly—and a coalition of businesses and organizations.
During the public hearing, lawmakers heard that the plans are market-based solutions that proved successful in other states, offering small employers the same robust options that only large employers can access today.
Allowing small employers to aggregate their employees under either structure gives them the opportunity to benefit and leverage many of the same strategies that large employers use to drive down healthcare costs.
Both types of plans are also subject to the same federal consumer protections that large group fully insured and self funded plans are subject to today (plans which cover roughly 70% of the Connecticut insurance market).
For example, small employers can operate as active purchasers and implement value-based benefit design, transparency tools, wellness initiatives, centers of excellence, wider networks, advanced primary care initiatives, cost-effective PBM arrangements, and more.
Because both plans are considered multiple employer welfare arrangements under ERISA, key provisions of the Public Health Service Act, HIPAA, the Newborns’ Act, Mental Health Parity Act, Women’s Health and Cancer Rights Act, and Genetic Information Nondiscrimination Act all apply.
These federal laws, along with express language in the bill, ensure that coverage cannot be denied for preexisting conditions with plans featuring the following protections:
- Preventive health services are covered without cost-sharing
- Maximum out-of-pocket expenses for covered benefits are capped
- Nondiscrimination rules for eligibility
- Parity in annual and dollar limits
- Mental health benefits with medical and surgical benefits
- Dependent coverage for adult children up to age 26
Essential Health Benefits
The bill also ensures that self-funded arrangements are subject to the ACA’s Essential Health Benefits and all state health benefit mandates essentially ensuring that the plan benefits are on par with what is offered in the fully insured small group market today.
“There has been a bipartisan group working on this and making sure that we put the values important to us in Connecticut of ACA standards, including pre-existing condition protections, into this bill,” Wood said during the committee’s March 14 meeting.
The self-funded plans will also be subject to extensive oversight by state insurance regulators and the federal Department of Labor.
For example, CID has full discretion under the bill to issue regulations that set capital, solvency, reserve, transparency, and audit requirements.
Plans also must purchase stop-loss insurance to protect against catastrophic claims and be subject to Title 1 of ERISA. Annual financial statements must also be filed with the federal labor department.
HB 6710 closely mirrors legislation that passed with bipartisan support in Virginia last year.
Under that bill, the legislature authorized the Virginia Chamber of Commerce to offer a self-funded health benefit arrangement subject to extensive oversight by the state’s insurance regulators.
The Virginia chamber is working with its third party administrator, to begin enrolling small employers.
Other states like Ohio, Missouri, Maine, Georgia, and Washington also allow similar arrangements.
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