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OLR Bill Analysis
SB 842
AN ACT CONCERNING HEALTH INSURANCE AND HEALTH CARE
IN CONNECTICUT.
SUMMARY
This bill requires the comptroller to establish a fully insured group
health insurance and pharmacy plan for multiemployer plans,
nonprofit employers, and smaller employers. Under the bill, a “small
employer” is an employer with 50 or fewer employees; it excludes
nonstate public employers (i.e., municipalities). Coverage offered
under the bill must generally comply with all existing state insurance
laws and health insurance benefit mandates, except where noted
below. The bill has conflicting provisions regarding the nature of the
health insurance plan the comptroller must establish (see COMMENT).
The bill establishes the Connecticut Health Insurance Exchange
account (CT-HIE) as a separate, nonlapsing account within the General
Fund. It contains any money required to be deposited into it by law,
including money generated from a fee on health insurers the bill
imposes. The initial aggregate assessment for an insurer for 2022 is $50
million, which is also the maximum assessment in any subsequent
year.
The Office of Health Strategy (OHS) and Access Health CT (“the
exchange”) must make a plan, and have it approved by the Insurance
and Real Estate Committee, to use money in the account to:
1. reduce the cost of qualified health plans offered through the
exchange, including by eliminating premiums for people at or
below 200% of the federal poverty level (FPL);
2. provide up to $25 million annually for premium and cost-
sharing subsidies for individuals ineligible for qualified health
plans (QHPs) (e.g., undocumented immigrants); and 2021SB-00842-R000640-BA.DOCX
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3. apply for and implement a Section 1332 waiver to (a) reduce the
cost of health insurance coverage, including premiums and cost
sharing, and (b) make health insurance coverage available to
people who are ineligible for QHPs.
The bill also expands the minimum health benefits for silver-level
QHPs and requires the plans to (1) have an actuarial value of 70% and
(2) provide insureds with the broadest provider network available
under QHPs offered by the carrier.
The bill also requires the Department of Labor to inform people
applying for unemployment assistance of potential health care
subsidies and refer them to the exchange. Under the bill, the exchange
must enroll these individuals in assistance if eligible.
The bill also increases the income eligibility for Husky A Medicaid
assistance for parents and caretakers from 155% of FPL to 201% of FPL.
It also requires OHS to determine whether Connecticut should seek a
federal Medicaid demonstration project waiver to reduce costs to
moderate- and low-income families.
Lastly, the bill requires the Auditors of Public Accounts to audit the
comptroller’s books and accounts maintained for partnership plans,
the state employee plan, and coverage offered by the comptroller
under the bill, including any maintained by a third-party
administrator. They must do beginning on July 1, 2021, and certify the
results to the governor (§ 4).
EFFECTIVE DATE: July 1, 2021
§§ 1-3 & 5-7— FULLY INSURED HEALTH INSURANCE PLA N
The bill requires the comptroller to develop a fully insured group
health insurance and pharmacy plan and offer it to plan participants
and beneficiaries (including dependents, as applicable) under
multiemployer plans, nonprofit employers and their employees, and
small employers and their employees. Under federal law, a
multiemployer plan is a collectively bargained health insurance plan
covering employees of more than one employer (also called a “Taft- 2021SB-00842-R000640-BA.DOCX
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Hartley Plan”). Generally, for a fully insured plan, the insurer assumes
the plan’s financial risk in return for premium payments. In this case,
presumably, the state pays a premium to one or more insurance
carriers to cover the cost of the health care plan. Several of the bill’s
provisions may be duplicative of, or in conflict with, procedures an
insurer must carry out in servicing a fully insured plan (see
COMMENT).
Premiums and Fees (§ 2)
Insurance coverage payments, which must be paid by participating
multiemployer plan administrators, nonprofits, and small employers
to the comptroller, must be the same as those paid by the state for state
employees, including premiums paid by state employees themselves.
However, the bill allows the comptroller to adjust the premiums to
reflect certain risk factors and requires him to adjust them to include
certain administrative and other fees.
Optional Premium Adjustments. Under the bill, premiums may be
adjusted for:
1. age, in accordance with a uniform age rating curve meeting
federal Affordable Care Act (ACA) requirements;
2. geography;
3. family size, so long as family premiums are not greater than the
sum of premium payments for (1) all covered family members
or (2) all covered family members age 21 and older and the
three eldest covered dependents younger than 21;
4. actuarially justified differences in plan design, provider
network, or administrative costs; and
5. the actual plan performance of the multiemployer, nonprofit, or
small employer seeking coverage, so long as it does not cause
the premiums to increase or decrease by more than 3% of the
premiums that would otherwise be charged. 2021SB-00842-R000640-BA.DOCX
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The bill also allows payments to be adjusted by a general
administrative fee on a per member per month basis, which may
include brokers’ fees.
Required Premium Adjustments. The bill requires these premium
payments to be adjusted to include:
1. the CT-HIE account fee (see § 3 below);
2. the health and welfare and public health fees (see §§ 5 & 6
below), which the bill requires the comptroller to annually
collect from multiemployer plan administrators, small
employers, and nonprofit employers;
3. the administrative fee the comptroller assesses on a per member
per month basis to retain an independent actuarial firm
required by the bill and ensure federal Employee Retirement
Income Security Act (ERISA) compliance; and
4. a risk fund fee the comptroller assesses to pay claims that
exceed premiums (see COMMENT).
An independent actuary must establish the premiums that satisfy
these requirements.
Coverage Requirements (§ 2)
Under the bill, coverage provided by the comptroller (presumably
under a new plan he establishes) must:
1. be available regardless of age, gender, health status, or any
other predictive health care factor;
2. include the same health enhancement program (HEP) as is
available under the state employee health insurance plan;
3. be consistent with value-based insurance design (i.e., a plan
design that lowers or removes financial barriers to essential,
high-value clinical services); 2021SB-00842-R000640-BA.DOCX
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4. be approved by the Insurance Department and Health Care
Cost Containment Committee in public meetings; and
5. cover all essential health benefits and state mandated health
benefits (see BACKGROUND).
The plan must also enable participants and beneficiaries to access
any assistance offered by the Office of the Healthcare Advocate (OHA)
(see § 8 below).
Adverse Determination Reviews. The plan must also include a
process for independent external reviews of adverse or final adverse
determination reviews that is equivalent to the review process existing
law requires for other health insurers.
Plan Administration (§ 2)
The comptroller must provide coverage for intervals of at least (1)
three years for multiemployer plans and nonprofits with more than 50
employees and (2) one year for small employers. Plan administrators
may apply to the comptroller for renewals any time before expiration.
Under the bill, the comptroller must develop procedures for
multiemployer plan administrators, nonprofits, and small employers
to apply for, renew, and withdraw from coverage, as well as any
participation rules he deems necessary.
However, the bill cannot be construed to require the comptroller to
offer coverage under the state plan or prevent the comptroller from:
1. procuring coverage for nonstate public employees from
different vendors than those that service state employees or
2. offering a plan design or benefit coverage levels that differ from
those offered to state employees, except that he is prohibited
from offering a high deductible health plan.
Exclusivity. The bill requires plan administrators, if they choose to
offer the comptroller’s plan to their employees, to offer it to all their
employees and to offer it exclusively (i.e., an administrator cannot 2021SB-00842-R000640-BA.DOCX
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offer both the comptroller’s plan and competing plan). However, the
bill allows participants to offer separate plans to active employees and
retirees.
Claim Tracking. The comptroller must establish accounting
procedures to track claims and premium payments from participating
multiemployer plans, nonprofit employers, and small employers.
Auditing and Compliance. Under the bill, the comptroller must
retain an independent actuarial firm to set premium payments that
conform to the bill’s requirements and actuarial best practices.
Beginning November 1, 2022, the actuary must annually (1) examine
the comptroller’s books and records, including those of anyone
providing services for the comptroller related to providing coverage
under the bill, and (2) prepare a report based on the examination. The
report must include:
1. the number of multiemployer plans, nonprofit employers, and
small employers receiving coverage during the prior fiscal year;
2. the number of plan participants and beneficiaries covered for
the prior fiscal year;
3. the aggregate premiums co llected, claims paid, and
administrative costs incurred for the prior fiscal year;
4. the most recent available medical loss ratio (MLR);
5. the balance of the accounts collecting premiums and paying
claims at the beginning and end of the prior fiscal year;
6. a comparison of these amounts to what the actuary
recommends as a reserve; and
7. the description and cost of each strategy the comptroller
employed to mitigate the risk of the plan to state finances, along
with any recommendations to improve or update the strategies
(see COMMENT). 2021SB-00842-R000640-BA.DOCX
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The actuarial firm must annually submit the report to the
comptroller, the Office of Policy and Management, and the
Appropriations and Insurance and Real Estate committees.
The bill requires the comptroller to also procure other necessary
services, including services to ensure ERISA compliance.
Risk Mitigation and Stop-Loss. The bill requires the comptroller to
make reasonable efforts to minimize any risk the plan poses to state
finances (see COMMENT). In doing so, the bill requires him to at least
(1) purchase aggregate stop-loss insurance on behalf of all plan
participants (i.e., multiemployer plans, nonprofits, and small
employers) or individual stop loss on each participant and (2) establish
a risk fund to pay claims that exceed premiums, fund it through an
assessment on plan participants, and adopt operating procedures.
Multiple Employer Welfare Arrangement. The bill deems that any
coverage offered by the comptroller is not a multiple employer welfare
arrangement (MEWA). (It appears that the federal, not state law,
determines whether a plan fulfills the criteria to be defined as a
MEWA.)
Health Insurance Report Card (§ 2)
Starting by October 15, 2021, the comptroller must annually prepare
a report card in consultation with the Department of Public Health and
Insurance Department commissioners. The report card must enable
plan participants and administrators to compare the coverage offered
by the comptroller to coverage offered on the private market to the
same extent that the Consumer Report Card on Health Insurance
Carriers in Connecticut permits similar comparisons. (By law, the
consumer report card is an annual report issued by the insurance
commissioner that contains certain comparative information on HMOs
and the 15 largest health insurers that use provider networks in the
state.)
The report card must be prominently displayed on the comptroller’s
website and disclose (1) the MLR for any fully insured coverage 2021SB-00842-R000640-BA.DOCX
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provided under the bill, (2) the MLR for private group health coverage
available to plan participants, and (3) any other information the
comptroller deems relevant.
Provider Disruption Report (§ 2)
The bill allows a plan participant that applies for coverage to
request a “provider disruption report” from the comptroller in a form
and manner he prescribes. The comptroller must provide the report
within 30 days. Neither the bill nor existing law define “provider
disruption report.”
Coverage Fee (§ 3)
By law, domestic insurers annually pay an insurance fund fee
proportionate to their total net direct premiums sufficient to fund the
insurance department, the OHA, and certain other programs (CGS §
38a-47 & -48). Starting with FY 22, the bill requires the comptroller to
annually assess a fee on plan participants and administrators
equivalent to the insurance fund fee the comptroller would pay for
plan coverage if he were a domestic insurer offering fully insured
group health coverage. (Because the comptroller’s coverage under the
bill is fully insured already, it appears that plan participants are
assessed the fee twice (see COMMENT).)
Revenue from the fee must be deposited into the CT-HIE account,
which the bill establishes (§ 13). (The bill requires funds in the CT-HIE
account to be spent for specified purposes (§ 13) but establishes a
separate fee to fully fund the amount needed for those purposes (§
9(c)). It is therefore unclear how the money generated by this coverage
fee may be spent under the bill.)
Similar to existing law’s mechanisms for establishing the insurance
fund fee, the bill requires the comptroller to annually provide each
administrator or plan participant the proposed assessment amount
and allow time for them to object. Beginning by July 15, 2021, he must
annually consult with the insurance commissioner to determine the
fee. He must provide the proposed amount to plan participants
annually beginning by July 31 and assess it (after incorporating any 2021SB-00842-R000640-BA.DOCX
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objections he feels appropriate) by September 1, and it must be paid in
two equal installments by the following December 31 and March 31.
The assessment may be appealed to the New Britain Superior Court in
the same manner as the insurance fund fee may be appealed under
existing law (CGS § 38a-52). If the fee is not paid on time, the
comptroller must impose a $25 per day late fee and 6% annual interest.
Regulations (§§ 2 & 3)
The bill authorizes the commissioner to adopt implementing
regulations for fully insured health insurance plans and the coverage
fee.
Health and Welfare and Public Health Fees (§§ 5-7)
By law, the insurance department assesses domestic insurers for
specific programs, including programs related to (1) childhood
vaccinations and other treatments through the Health and Welfare Fee
(CGS § 19a-7j) and (2) breast and cervical cancer detection and
treatment, AIDS services, and syringe services through the Public
Health Fee (CGS § 19a-7p). The bill requires the comptroller to pay
these fees to the insurance commissioner on behalf of plan
participants. It makes corresponding changes (1) requiring the
comptroller to report to the insurance commissioner, in a form and
manner he prescribes, the number of plan participants and
beneficiaries as of the prior May 1 (data that is used to calculate the
fee) and (2) incorporating the comptroller into certain existing statutes
governing these fees. Among other things, this allows plan
administrators and employers covered under the plan to appeal the fee
to the New Britain Superior Court (CGS § 38a-52) and be eligible for a
refund if they overpaid it.
In a fully insured plan, as required under the bill, these fees are
already assessed on health insurers providing the plan. Thus, these
fees appear to be in addition to fees assessed under existing law (see
COMMENT).
Assistance from the Office of the Healthcare Advocate (§ 8)
The bill requires OHA to assist plan participants and beneficiaries to 2021SB-00842-R000640-BA.DOCX
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the same extent it would assist health insurance consumers.
§§ 9-13, 15 & 16 — OHS PLAN AND CT-HIE ACCOUNT SPENDING
OHS Plan for the Exchange (§ 16)
The bill requires OHS, in consultation with the exchange, to develop
a plan for the exchange to:
1. establish a subsidiary to create a marketplace for health carriers
to offer affordable health insurance coverage to people who are
ineligible for QHPs;
2. seek, and, if granted, implement a state innovation waiver
under Section 1332 of the federal Affordable Care Act to (a)
reduce health insurance costs, including premiums and cost-
sharing, and (b) make health insurance coverage available to
those who are ineligible for QHPs; and
3. beginning with the 2022 plan year, use money deposited in the
CT-HIE account for specified purposes described below.
Legislative Approval (§ 16(d))
OHS must report the plan to the Insurance and Real Estate
Committee by August 1, 2021. By October 1, 2021, the committee must
approve or reject the plan and advise OHS and the exchange of its
decision. If the committee does not act by October 1, 2021, the plan is
deemed rejected.
Exchange Subsidiary (§ 11)
Subject to the Insurance and Real Estate Committee’s approval of
OHS’s plan, the bill requires the exchange to establish a subsidiary by
November 1, 2021, to create a health insurance marketplace for
individuals who are not eligible for QHPs through the exchange (e.g.,
people who are undocumented).
Existing law allows the exchange to create subsidiaries, which, once
established, are quasi-public agencies for tax purposes and generally
have the exchange’s powers and privileges (CGS § 38a-1093). 2021SB-00842-R000640-BA.DOCX
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CT-HIE Account Purposes (§§ 13 & 16(b))
The bill requires the exchange to administer the CT-HIE account
and consult with OHS to reduce insurance premiums and establish a
reinsurance program. The bill requires OHS’s plan to provide for the
exchange to use money in the CT-HIE account to do the following,
beginning in the 2022 plan year:
1. make coverage affordable for people ineligible for QHPs by,
among other things, providing up to $25 million annually for
premium and cost-sharing subsidies;
2. implement, if federally approved, the state innovation waiver;
and
3. reduce the cost of QHPs.
Specifically, account funds must be used to reduce the cost of QHPs
by, among other things, (1) reducing premiums and cost-sharing for
households at or above 201% of FPL, (2) eliminating premiums for
households with income below that level, and (3) establishing a
reinsurance program using up to $20 million in the account annually.
CT-HIE Account Funding Determination (§ 9(b))
Starting July 1, 2022, and subject to legislative approval of OHS’s
plan, the bill requires OHS to annually determine an amount, up to $50
million, that the exchange requires to complete its duties described
above and report it to the insurance commissioner. The bill requires
OHS by July 1, 2021, to report the amount for 2022 as $50 million
(making the initial aggregate assessment $50 million).
CT-HIE Account Fee Amount (§ 9(c))
Under the bill, the amount that OHS determines above is funded
through a fee on health insurers. The bill requires the insurance
commissioner to assess insurers and HMOs doing business in
Connecticut, including exempt insurers, a fee proportionate to their
covered lives sufficient to fully meet the exchange’s budgetary needs
described above (up to the aggregate $50 million cap). (Under the bill
and existing law, an “exempt insurer” is an insurer acting in its 2021SB-00842-R000640-BA.DOCX
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capacity as a third-party administrator.) This money is deposited into
the CT-HIE account. (Presumably, if the Insurance and Real Estate
Committee rejects OHS’s plan for the exchange to spend money in the
account for the purposes described above, the commissioner will not
assess the fee.)
Beginning July 1, 2021, each insurer, HMO, and exempt insurer
must annually report to the commissioner the number of enrolled or
insured lives in the state covered by certain health insurance plans as
of the preceding May 1. The number must not include any individuals
covered by insurance sold in the small group market, Medicare, any
DSS medical assistance program, Medicare Part C plans, or workers’
compensation insurance. The reporting must be in a form and manner
the commissioner prescribes and applies to health insurance policies
(including self-insured plans) delivered, issued, renewed, amended, or
continued in Connecticut that cover (1) basic hospital expenses; (2)
basic medical-surgical expenses; (3) major medical expenses; or (4)
hospital or medical services, including those provided under an HMO
plan.
The commissioner must determine the fee annually, beginning by
August 1, 2021, based on the amount of covered lives reported to him
in July and the amount that OHS determines the exchange needs.
Annually, also by August 1, the commissioner must inform insurers,
health care centers (i.e., HMOs), and exempt insurers of the proposed
fee. These entities must pay the fee by November 1 of that year.
Insurers failing to file the report or pay the fee must pay a late filing
fee of $100 per day to be deposited into the CT-HIE account.
The bill authorizes the commissioner to require insurers to produce
any supporting documents used to prepare the report. If he determines
there exists anything other than a good faith discrepancy between the
actual and reported numbers of covered lives, he must impose a civil
penalty of up to $15,000 per report.
Grievances and Overpayments. Any aggrieved insurer may appeal
the assessment in the same manner that existing law allows them to do 2021SB-00842-R000640-BA.DOCX
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so for other insurance assessments. This includes appealing the
assessment to the New Britain Superior Court (CGS § 38a-52).
The bill requires the commissioner to apply an overpayment of the
fee as a credit against the next year’s fee, so long as (1) the
overpayment is more than $5,000 and (2) by April 1 of that year, the
insurer, HMO, or exempt insurer notifies the commissioner of the
overpayment amount and provides supporting evidence.
Within 90 days of receiving the notice and evidence, the
commissioner must determine whether an overpayment occurred and
notify the payor.
If an insurer fails to notify the commissioner within this timeframe,
they waive their right to an overpayment refund.
Retaliatory Taxes (§ 9(d))
The bill establishes circumstances under which nondomestic
insurers (i.e., insurers domiciled outside of Connecticut) may be
exempt from the assessment. Under the bill, if another jurisdiction
imposes a retaliatory fee on a Connecticut-domiciled insurer, fraternal
benefit society, hospital or medical service corporation, HMO, or other
entity, it may appeal to the Connecticut insurance commissioner
within 60 days for a verification that the assessment is causing a
retaliatory fee. If the commissioner verifies that the fee is retaliatory, he
must exempt nondomestic insurers and nondomestic exempt insurers
from the assessment.
These decisions can be appealed in the same manner as assessments
under existing law as described above.
Regulations (§ 9(e))
The bill authorizes the commissioner to adopt implementing
regulations for the bill’s provisions on the CT-HIE fee.
Exchange Reporting (§ 12)
The exchange’s chief executive officer must, beginning by January 1,
2023, annually report to the Appropriations, Human Services, and 2021SB-00842-R000640-BA.DOCX
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Insurance and Real Estate committees on how funds in the CT-HIE
account were spent and whether the funding was sufficient to (1)
reduce the costs of QHPs, (2) make coverage affordable and available
for people ineligible for QHPs, and (3) implement the state innovation
waiver.
§§ 2, 11, 12 & 15 — DEMOGRAPHIC DATA REP ORTING
The bill establishes demographic data collection procedures and
requires OHS to establish standardized categories for this purpose.
These procedures must (1) include self-reported ethnic and racial data,
(2) use standardized categories developed by OHS, and (3) include an
“other” category for individuals to self-identify, allowing individuals
to select multiple ethnicities or races or provide their own.
For the fully insured plan required under the bill, the comptroller
must establish these procedures to collect participants’ and
beneficiaries’ demographic data. Starting by November 1, 2022, the
comptroller must annually submit a report containing aggregate data
collected the previous year to the Insurance and Real Estate
Committee.
Similarly, if the exchange establishes a subsidiary to create a
marketplace for health carriers to offer affordable health insurance
coverage to people who are ineligible for QHPs as authorized under
the bill, then the subsidiary must require each health carrier offering
coverage through it to (1) collect demographic data to the same extent
as described above and (2) report aggregate demographic data to the
subsidiary annually, beginning by February 1, 2022.
The bill also requires the subsidiary to annually report this
aggregate demographic data to the exchange annually, beginning by
March 1, 2022.
If the exchange uses CT-HIE funds to establish premium and cost
sharing subsidies, then the exchange must collect demographic data
for subsidy recipients, at least annually, in the manner described
above. Beginning by April 1, 2022, the exchange’s chief executive 2021SB-00842-R000640-BA.DOCX
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officer must annually report to the Insurance and Real Estate
Committee aggregate demographic data it collects as well as the
aggregate demographic data the subsidiary reports to the exchange.
§§ 11 & 18 — UNEMPLOYMENT REFERRA LS
The bill requires the Department of Labor, within available
appropriations, to notify people applying for unemployment
assistance of their potential eligibility for health care subsidies or other
assistance and refer them to the exchange. Under the bill, the exchange
must determine their eligibility for free or subsidized health coverage
and other assistance, including supplemental nutrition assistance
(SNAP), and, if individuals are eligible, enroll them. (It is unclear
whether the exchange can process a SNAP application).
§ 14 — QHPS OFFERED THROUGH ACCESS HEALTH CT
To the extent federal law allows, and regardless of any other state
law, the bill expands the minimum coverage for individual market,
silver-level QHPs. Beginning with the 2022 plan year, these plans must
cover:
1. angiotensin converting enzyme inhibitors for individuals
diagnosed with congestive heart failure, diabetes, or coronary
artery disease;
2. anti-resorptive therapy for individuals diagnosed with
osteoporosis or osteopenia;
3. beta-adrenergic blocking agents for individuals diagnosed with
congestive heart failure or coronary artery disease;
4. blood pressure monitors for individuals diagnosed with
hypertension;
5. inhaled corticosteroids and peak flow meters for individuals
diagnosed with asthma;
6. insulin and other glucose lowering agents, retinopathy
screening, glucometers and hemoglobin A1C testing for 2021SB-00842-R000640-BA.DOCX
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diabetics;
7. international normalized ratio testing for individuals diagnosed
with liver disease or a bleeding disorder;
8. low density lipoprotein testing for individuals diagnosed with
heart disease;
9. selective serotonin reuptake inhibitors for individuals diagnosed
with depression; and
10. statins for individuals diagnosed with heart disease or diabetes.
To the extent permitted by federal law and regardless of any other
state law, the bill also requires these plans to have a minimum
actuarial value of 70% and provide insureds with the broadest
provider network available under QHPs offered by the carrier.
§ 16 — MEDICAID DEMONSTRATI ON PROJECT WAIVER
The bill requires OHS to consult with DSS and the exchange to
determine whether Connecticut should seek a federal Medicaid
demonstration project waiver to reduce costs to moderate- and low-
income families. If OHS determines the state should proceed, it may
submit a report to the Appropriations, Human Services, and Insurance
and Real Estate committees disclosing its determination and reasons. The
bill does not establish a deadline for OHS to make its determination or
submit its report. Under existing law, DSS must generally submit
Medicaid waiver applications to the Appropriations and Human Services
committees for approval (CGS § 17b-8).
§ 17 — EXPANDING HUSKY A
By law, DSS provides Medicaid coverage to children under age 19
and their parents or caretaker relatives through HUSKY A. The bill
expands HUSKY A eligibility by raising the income limit for parents
and caretaker relatives from 155% of FPL to 201% of FPL.
BACKGROUND
Related Bills 2021SB-00842-R000640-BA.DOCX
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SB 956 (File 516), favorably reported by the Human Services
Committee, requires DSS to provide medical assistance to people
regardless of immigration status so long as they otherwise meet
income limit requirements.
sSB 1056 (File 521), favorably reported by the Human Services
Committee, generally increases the income limit for Medicaid to 200%
of FPL.
sSB 1090 (File 526), favorably reported by the Human Services
Committee, establishes a commission to study a single payer, universal
health care program.
ERISA
ERISA generally governs employee insurance and pension plans
(“employee welfare plans”) but does not apply to governmental plans
(29 U.S.C. § 1003). As a result, opening up the state health insurance
plan to private employers may impact this exemption.
A plan subject to ERISA requirements must, among other things:
1. manage plans for the exclusive benefit of participants and
beneficiaries;
2. comply with limitations on certain plans' investments in
employer securities and properties; and
3. report and disclose information on the operations and financial
condition of plans to the government and participants.
Essential Health Benefits and Mandated Benefits
Under state and federal law, “essential health benefits” are health
care services and benefits that fall within the following categories:
1. ambulatory patient services;
2. emergency services;
3. hospitalization; 2021SB-00842-R000640-BA.DOCX
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4. maternity and newborn health care;
5. mental health and substance use disorder services, including
behavioral health treatment;
6. prescription drugs;
7. rehabilitative and habilitative services and devices;
8. laboratory services;
9. preventive and wellness services and chronic disease
management; and
10. pediatric services, including oral and vision care.
In addition to essential health benefits, the state mandates that fully
insured plans cover a range of health services (“health insurance
benefit mandates”). These benefits include services such as diabetes
screening, drugs and devices, and breast cancer screening.
COMMENT
The bill has conflicting provisions regarding the nature of the health
insurance plan the comptroller must establish. It requires the
comptroller to develop a fully insured group health insurance plan,
which is generally one in which a health insurance carrier provides
insurance and the insured party (i.e., the state under this bill) pays
premiums for the coverage. However, the bill requires the comptroller
to perform a number of duties that would generally be performed by
the insurance carrier for a fully insured plan, including, for example,
establishing a risk-fund and an associated fee to pay claims above
premiums (§ 2); establishing and collecting premiums (§ 2); and
assessing the Health and Welfare and Public Health fees (§§ 5-7).
Additionally, the bill requires the comptroller to purchase stop-loss
insurance (§ 2), but fully-insured policy holders do not typically do so.
COMMITTEE ACTION
Insurance and Real Estate Committee 2021SB-00842-R000640-BA.DOCX
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Joint Favorable Substitute Change of Reference - FIN
Yea 12 Nay 6 (03/11/2021)
Finance, Revenue and Bonding Committee
Joint Favorable
Yea 31 Nay 17 (04/22/2021)