Broad Support for Small Business Employee Healthcare Bill

More than 50 organizations testified Feb. 27 in support of legislation offering small business employees access to affordable, high quality healthcare options.

Small employers, trade associations, nonprofits, and healthcare policy experts shared their support for HB 5247 with members of the legislature’s Insurance and Real Estate Committee.

CBIA’s Wyatt Bosworth told the committee that the bill was “the most comprehensive, consumer friendly Multiple Employer Welfare Arrangement legislation in the country and would provide small employers with a new option for health benefits.”

A similar bill was championed by a coalition of bipartisan lawmakers led by Insurance Committee co-chair Rep. Kerry Wood (D-Rocky Hill) last year.

This year’s proposal allows qualifying chambers of commerce and trade associations to aggregate their respective memberships and offer robustly regulated self-funded health benefit arrangements—essentially acting as one large employer.

‘Out of Reach’

Today, municipalities, Taft-Hartley trusts, and the state of Connecticut are authorized to pool employers and municipalities with virtually no oversight.

HB 5247 extends this option, including strict oversight by the Connecticut Insurance Department and federal Department of Labor, so small businesses and nonprofits can provide similar benefits to their employees.

Bosworth told lawmakers at the hearing that the rapidly decreasing enrollment (down to less than 80,000 lives today, compared to over 230,000 six years prior) and carrier consolidation in the ACA fully-insured market, combined with rising health system costs, has resulted in many seeking lower cost, more benefit-rich products in the self-funded marketplace.

“Small employers are moving to self-funded products because they have (1) better control over plan designs; (2) access to important claims and utilization data; and (3) access to plan savings,” he said.

“According to AccessHealthCT, self-funded small employers are seeing up to 8%-10% in premium savings with ‘no material network or plan design differences’.

“However, despite being beneficial plans for many small employers, these self-funded plans are still out of reach for many of the smallest employers in the state.

“Many smaller employers simply lack the cash flow and ability to actively manage their own health benefits to take advantage of these plans.”

Level Playing Field

Bosworth said HB 5247 authorizes new healthcare benefit products giving small employers the opportunity to participate in self-funded arrangements that large employers, municipalities, unions, and the state of Connecticut participate in today.

If passed, HB 5247 will allow small employers to band together and offer self-funded health benefit arrangements and finally give these firms increased buying power when negotiating terms with PBMs, hospitals, and carriers.

The bill has a number of requirements, including (1) direct regulatory oversight by CID and DOL; (2) strict requirements to offer robust plan benefits and design on par with the ACA market; (3) cover all ACA consumer protections codified under ERISA; (4) maintain stop-loss; (5) apply consistent pooling points, and (6) offer plans on a guaranteed issue and guaranteed renewable basis.

PMP Corporation chief financial officer Peter Kellogg told lawmakers about the barriers his small company faces every year when purchasing healthcare coverage.

“It constantly feels as though we are victims to the whims of the market and unable to compete with the larger players.”

PMP Corporation’s Peter Kellogg

“As a small company, I currently have no negotiating power when it comes to my health insurance renewals,” he said.

“My company has a May 1 renewal date and I am being told that we are going to have a 19% increase this year, but do not have any information on why that is going to happen.

“To offset continuing escalation in premiums, we have had to increase deductibles and shrink our offerings.

“It constantly feels as though we are victims to the whims of the market and are unable to compete with the larger players.”

Leverage

James Shearin, president-elect of the Connecticut Bar Association, which represents more than 8,000 attorneys around the state, echoed similar sentiments.

“Our members care about their employees, but they are struggling to provide them with affordable, acceptable insurance, but they do not have the leverage to negotiate effectively with the insurance companies on either price or plan designs,” he said.

“With the Bar Association negotiating on behalf of all its other members, it will be able to garner the best insurance options at more affordable rates for its member firms.”

Nonprofit service providers, many of which are small employers, also testified in support.

“The options in the small group market remain limited and expensive.”

SARAH Inc.’s Doug Ardrey

Doug Ardrey, CEO for SARAH Inc., a nonprofit that provides Birth to Three and employment services for adults with intellectual disabilities, told lawmakers that “the options in the small group market remain limited and expensive.”

“SARAH Inc. currently offers employees high deductible and co-pay plans,” he said.

“We find we must change health insurance carriers about every two years to try and offer more affordable plans.

“However as previously mentioned we have fewer choices, limiting our ability as an employer to offer employees more affordable health insurance options.”

MEWA Success

Committee members also heard from Kim Daigle, president and CEO of CU Insurance Solutions and plan administrator for the Maine Credit Union League Insurance Trust.

Five years ago, Daigle helped create a MEWA to allow Maine credit unions to collectively buy healthcare insurance as a large group and stabilize the large renewal increases they faced.

The trust today provides benefits to 26 credit unions, insuring over 1,000 employees and dependents.

Daigle emphasized the robust regulation and collaboration between the trust and the Maine Bureau of Insurance.

The trust was licensed by the bureau, hired an actuary to assist with rating methodologies, purchased specific and aggregate stop-loss, maintains fiduciary liability insurance, and requires organizations to collect three-month premiums for reserves to ensure solvency.

The Maine trust has been a wild success, with three years of increases around 6%, well below what members were experiencing in the small group market.

The trust is also subject to annual audits and monthly financial reporting to the Bureau of Insurance.

The trust has been a wild success, experiencing three years of increases around 6%, well below what members were experiencing in the ACA small group market.

This year, Daigle told lawmakers that the base rate was held flat and credit unions continue to save money through this option.

She urged the committee to advance HB 5247 to allow Connecticut small employers to enjoy the same benefits her members enjoy.

Credit Union League of Connecticut president and CEO Bruce Adams urged lawmakers to allow his organization to allow similar benefits in this state.

Value-Based Insurance Design

Jeff Hogan, the president and CEO of Upside Health Advisors and a nationally-recognized expert in employer-sponsored healthcare and alternative payment models, highlighted portions of the bill requiring value-based insurance design.

Hogan told lawmakers these new employer plans can build on the success enjoyed by state of Connecticut employees and large employer health plans.

For example, Hogan cited the Comptroller Sean Scanlon as being a leader in this space, effectively creating plan designs that promote value-based care and infrastructure.

These new employer plans can build on the success enjoyed by state of Connecticut employees and large employer health plans.

He also highlighted employers such as Stew Leonard’s, which adopted these strategies and reduced employee/dependent cost share and deductibles while increasing member satisfaction.

The MEWA structure proposed in HB 5247 implements similar programs.

For example, Stew Leonard’s deployed high-value multi-system solutions that exclude high-cost systems that demonstrate no correlation to higher quality, and implemented affordable primary-care driven models, transparent PBM contracting, and traditional broad PPO options to ensure no forced disruption for members.

JPMorgan recently opened three on-site advanced primary care centers for employees in the Columbus, Ohio area that will improve care delivery at a lower cost.

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For more information, contact CBIA’s Wyatt Bosworth (860.244.1155) | @WyattBosworthCT.