State Health Insurance Exchange Abandons $2.8M Fee Hike
The state health insurance exchange has abandoned a controversial proposal hiking the assessment rate on fully-insured health insurance plans from 1.65% to 1.80%.
The Access Health CT board delayed an April 20 vote on the assessment change—essentially a tax increase—after CBIA submitted comments opposing the plan.
The proposed $2.8 million assessment hike would have raised premium costs for small businesses and their employees.
The Access Health CT board voted last week to remove the assessment from its fiscal 2023-2024 budget.
Echoing CBIA’s comments, several board members voiced concerns about the proposal given Connecticut’s workforce and economic challenges, as well as the uncertainty about the future of federal pandemic funding.
The exchange will now draw from its reserves to cover the $2.8 million budget deficit.
Declining Revenues, Rising Costs
The exchange’s finance committee, which recommended the assessment hike, justified the measure based on a decline in assessment revenues over the last three fiscal years.
Access Health CT’s operating expenses are projected to outpace revenues an average $2.8 million through fiscal year 2025.
According to the exchange, shrinking revenues are caused by small group market contraction due to employers moving to self-insured products, as well as costly new requirements mandated by the state and federal governments.
CBIA’s Wyatt Bosworth told the exchange board that small businesses, with no obligations under the federal Affordable Care Act to offer health insurance to employees, faced ever-escalating premium increases.
“Assessments and taxes continue to be a major driver in overall insurance costs for individuals and small businesses,” said CBIA’s Wyatt Bosworth.
“Recent data acquired from the health carriers shows that fully-insured plans incur $359.6 million in assessments, taxes, and fees annually; self-insured plans incur $74 million annually.
“This results in a per member cost in the fully-insured market of $591 annually, and $54 annually for the self-insured market.
“The proposed assessment increase before you today would add $2.8 million to the $359.6 million that fully-insured plans already pay.”
For more information, contact CBIA’s Wyatt Bosworth (860.244.1155) | @WyattBosworthCT
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