Analyst: MP Page 1 5/8/23
OFA Bill Analysis
SB 1217
AN ACT CONCERNING PAYMENTS BY INSURANCE COMPANIES
FOR DEPOSIT INTO THE INSURANCE FUND.
SUMMARY:
This bill limits the type of domestic insurance entities required to pay
the portion of the Insurance Fund general assessment that supports the
budgets of the Office of the Healthcare Advocate (OHA) and the Office
of Health Strategy (OHS). Under the bill, this portion of the general
assessment applies only to domestic insurance companies and entities
that have written policies of health insurance in the preceding calendar
year.
The bill also makes related technical and conforming changes to the
statutory requirements for determining and notifying insurers of their
annual assessment amounts.
EFFECTIVE DATE: July 1, 2023
New Assessment Methodology
Assessment to Fund OHA and OHS
Existing law requires domestic insurance companies as well as
hospital and medical service corporations to annually pay the insurance
commissioner an assessed amount equal to:
(1) the actual expenditures, including fringe benefits and capital
equipment purchases, of the Insurance Department,
(2) the actual expenditures, including fringe benefits and capital
equipment purchases, of OHA,
(3) OHS Insurance Fund appropriations, as reduced by the amount 2023SB-01217-R000734-BA.DOCX
Analyst: MP Page 2 5/8/23
of federal reimbursement received for allowable Medicaid
administrative expenses,
(4) the expenditures made on behalf of the Insurance Department,
OHA, and OHS from the Capital Equipment Purchase Fund,
excluding expenditures made on behalf of the Health Systems
Planning Unit of OHS, and
(5) an amount that covers the Department of Social Services’ fall
prevention program appropriation.
Under the bill, items (2) and (3) above would only be assessed on
insurance companies and hospital and medical service corporations
(i.e., HMOs) that wrote health insurance policies in the preceding
calendar year. Other types of domestic insurers would not be
responsible for paying a share of the OHA expenditures and OHS
budget in the Insurance Fund.
As under existing law, the bill requires the insurance commissioner
to deposit these payments in the Insurance Fund.
Calculating Insurer Liability
Existing law and the bill require the Commissioner of Revenue
Services, on or before June 30
th
annually, to provide the Insurance
Commissioner with a statement of the Connecticut insurance premium
taxes imposed on domestic insurance companies and entities during the
preceding calendar year.
The bill requires the Insurance Commissioner to use that statement
to prepare an additional statement of the amount of insurance premium
taxes imposed on those domestic companies and entities that
specifically wrote policies of health insurance the preceding year.
Currently, the Insurance Commissioner then provides a statement to
each domestic entity liable under the general assessment that lists: (1)
the amounts being funded through the assessment, (2) a statement of
the total insurance premium taxes imposed on domestic insurance
companies and entities on Connecticut business in the preceding 2023SB-01217-R000734-BA.DOCX
Analyst: MP Page 3 5/8/23
calendar year, and (3) the proposed assessment against that company or
entity.
Under the bill, the Insurance Commissioner must state:
(1) the accounts to be funded as separate line items and for the fiscal
year beginning July 1 of the year the statement is sent,
(2) the total insurance premium taxes and subscriber charges
imposed on all domestic companies and entities, and each company’s or
entity’s share of that total amount,
(3) the total insurance premium taxes and subscriber charges
imposed on companies providing health insurance, and each company’s
or entity’s share of that total amount, and
(4) the proposed assessment against each company or entity.
Under the bill, the portion of the assessment related to the
appropriations of OHA and OHS is divided only among those domestic
companies or entities that provided health insurance, in accordance
with their share of the insurance premium taxes imposed on that group.
The remaining portion of the assessment that funds the Insurance
Department and other accounts is divided among all domestic insurers
and entities in proportion to the entity’s share of the total insurance
premium taxes, as the whole assessment is calculated under current law.
Unchanged by the bill, when the amount any such company or entity
would be assessed exceeds 25% of the actual expenditures of the
Insurance Department, OHA, and OHS (from the Insurance Fund), the
excess amount is assessed against and paid by all other domestic
companies and entities in proportion to their respective shares of the
total insurance premium taxes imposed.
COMMITTEE ACTION
Appropriations Committee
Joint Favorable
Yea 40 Nay 12 (04/20/2023) 2023SB-01217-R000734-BA.DOCX
Analyst: MP Page 4 5/8/23