OFFICE OF FISCAL ANALYSIS
Legislative Office Building, Room 5200
Hartford, CT 06106 (860) 240-0200
http://www.cga.ct.gov/ofa
SB-1045
AN ACT CONCERNING STEP THERAPY, ADVERSE
DETERMINATION AND UTILIZATION REVIEWS, AND HEALTH
INSURANCE COVERAGE FOR CHILDREN, STEPCHILDREN AND
OTHER DEPENDENT CHILDREN.
Primary Analyst: AN 4/7/21
Contributing Analyst(s):
OFA Fiscal Note
State Impact:
Agency Affected Fund-Effect FY 22 $ FY 23 $
State – ACA Mandate GF - Cost See Below See Below
Note: GF=General Fund
Municipal Impact:
Municipalities Effect FY 22 $ FY 23 $
Various Municipalities STATE
MANDATE
1
- Cost
See Below See Below
Explanation
The bill does not result in a fiscal impact to the state employee and
retiree health plan or municipalities that participate in the Partnership
Plan as step therapy is not required by the plans.
The bill will increase costs to certain fully insured municipal plans
which currently require step therapy for conditions specified in the
bill. The coverage requirements will result in increased premium costs
when municipalities enter into new health insurance contracts after
January 1, 2022. In addition, many municipal health plans are
1
State mandate is defined in Sec. 2-32b(2) of the Connecticut General Statutes, "state
mandate" means any state initiated constitutional, statutory or executive action that
requires a local government to establish, expand or modify its activities in such a
way as to necessitate additional expenditures from local revenues. 2021SB-01045-R000370-FN.DOCX Page 2 of 2
recognized as “grandfathered” health plans under the Affordable Care
Act (ACA). It is unclear what effect the adoption of certain health
mandates will have on the grandfathered status of certain municipal
plans under ACA.
Pursuant to federal law, self-insured health plans are exempt from
state health insurance mandates.
To the extent that step therapy is required by the drug formulary for
plans under the Exchange, there is a cost to the state to defray costs.
The cost to the state will vary based on the impact to plan premiums,
based on current and projected utilization of step therapy for the
treatments outlined in the bill.
While states are allowed to mandate benefits in excess of the
essential health benefit (EHB), federal law requires the state to defray
the cost of any such additional mandated benefits for all plans sold in
the exchange, by reimbursing the carrier or the insured for the excess
coverage. Absent further federal guidance, state mandated benefits
enacted after December 31, 2011 cannot be considered part of the EHB
unless they are already part of the benchmark plan.
The Out Years
The fiscal impact in the outyears will vary based on an increase in
premiums.