OFFICE OF FISCAL ANALYSIS
Legislative Office Building, Room 5200
Hartford, CT 06106 (860) 240-0200
http://www.cga.ct.gov/ofa
sSB-416
AN ACT PROMOTING COMPETITION IN CONTRACTS BETWEEN
HEALTH CARRIERS AND HEALTH CARE PROVIDERS.
Primary Analyst: MP 4/5/22
Contributing Analyst(s): JS, RJW
Reviewer: ME
OFA Fiscal Note
State Impact:
Agency Affected Fund-Effect FY 23 $ FY 24 $
Insurance Dept. IF - Potential
Cost
At least
81,704
At least
163,407
Insurance Dept. GF - Potential
Revenue Gain
Minimal Minimal
Note: IF=Insurance Fund; GF=General Fund
Municipal Impact:
Municipalities Effect FY 23 $ FY 24 $
Various Municipalities Uncertain Potential Potential
Explanation
The bill prohibits health insurance carriers, health care providers,
health plan administrators, and the agents of those entities from
including certain provisions in their health care contracts and results in
the fiscal impacts described below.
The bill authorizes the Insurance Commissioner to adopt regulations,
including regulations that specify additional prohibited clauses with
anti-competitive effects. In the event the Insurance Department (DOI)
develops such regulations, the agency is anticipated to incur consultant
costs of up to $25,000 because the agency lacks expertise in provider
contracting arrangements.
DOI does not currently review contracts between health carriers and 2022SB-00416-R000362-FN.DOCX Page 2 of 2
providers (or health plan administrators and providers), and the bill
does not specify any enforcement requirements. To the extent DOI
begins reviewing such contracts for compliance in the agency's normal
course of business, the agency is anticipated to require one or more
additional staff with expertise in provider contracting. The annualized
cost of one insurance associate examiner would be $163,407 ($81,814
salary and $81,593 fringe benefits). FY 23 would reflect half-year costs.
Depending on the number of related complaints and violations,
enforcement of the bill's provisions may result in 1) costs for outside
legal services associated with more formal hearings and 2) a minimal
revenue gain to the General Fund from fines of up to $15,000 each.
The bill may result in changes in health care costs or premiums to
fully insured municipal health plans to the extent that plans contain
contract limitations contained in the bill. Any changes in premium costs
will occur when municipalities enter new health insurance contracts
after January 1, 2023.
The bill does not result in a fiscal impact to the University of
Connecticut Health Center because none of the health center's contracts
include the provisions that are prohibited by the bill.
The Out Years
The annualized ongoing fiscal impact identified above would
continue into the future subject to the bill's impact on health care costs
for municipalities, changes in costs for wages and fringe benefits for any
additional staff, the number of DOI hearings related to the prohibited
contract clauses, and the fines assessed.
Sources: Connecticut Insurance Department