Researcher: MK Page 1 4/10/25
OLR Bill Analysis
HB 7226
AN ACT CONCERNING LONG -TERM CARE INSURANCE AND
ELIGIBILITY FOR STATE CONTRACTS.
SUMMARY
This bill makes various changes affecting long-term care (LTC)
insurance policy rate increases (see BACKGROUND) and state contracts
with insurers. It applies to insurance companies, fraternal benefit
societies, hospital and medical service corporations, and HMOs
(“insurers”).
For LTC insurance premium rate increases, the bill does the
following:
1. requires the Insurance Department to hold a hearing for any LTC
premium rate increase request above 10% and insurers to notify
policyholders about the hearing date and time at least 14 days in
advance (§ 1);
2. starting January 1, 2026, prohibits insurers from delivering,
issuing, renewing, continuing, or amending an LTC policy in the
state unless they give advanced written notice to someone before
they purchase the policy about the risk of future premium rate
increases (§ 2); and
3. requires rate filings for individual LTC policies to certify that the
increase is necessary to prevent a material risk of insolvency (§
3).
Additionally, starting October 1, 2025, the bill prohibits state agencies
from executing state contracts with health insurers unless the insurer
represents in the contract that it has not violated (1) the bill’s hearing
and notification requirements for LTC premium rate increases or (2)
existing law’s rate filing requirements for individual LTC policies. 2025HB-07226-R000650-BA.DOCX
Researcher: MK Page 2 4/10/25
Correspondingly, the bill requires the insurance and administrative
services commissioners to enter into a memorandum of understanding
to share information that enables the administrative services
commissioner to verify the representations insurers made in these
contracts.
EFFECTIVE DATE: January 1, 2026
INDIVIDUAL LTC POLICIES
Under existing law, insurers cannot use or change premium rates for
individual LTC policies without filing the rates with the insurance
commissioner for approval. These rate filings must demonstrate that
anticipated claims in relation to premiums, combined with actual
experience, will meet the law’s required minimum loss ratio of 60%.
(This means that for every dollar of premium collected, the insurer must
spend at least 60 cents on claim payments.)
The bill additionally requires the rate filings to certify that the
increase is necessary to prevent a material risk of insolvency.
REQUIRED REPRESENTATIONS IN STATE CONTRACTS
State Contract Definition
Under the bill, a “state contract” is an agreement (or a combination
or series of them) between a state agency and a person, firm, or
corporation, with a total value of more than $100,000 in a calendar or
fiscal year, for the following:
1. a project to construct, alter, or repair any public building or
public work;
2. services, including consulting and professional services;
3. procuring supplies, materials, or equipment; or
4. a lease or licensing arrangement.
It does not include a contract between a state agency or a quasi-public
agency and a political subdivision of the state. 2025HB-07226-R000650-BA.DOCX
Researcher: MK Page 3 4/10/25
Required Representations
Starting October 1, 2025, the bill prohibits state agencies from
executing a contract with an insurer, unless the insurer’s principals or
key personnel (e.g., officers, directors, or shareholders) represent in the
contract that, during the previous five years, they or the insurer’s agent
have not violated (1) the bill’s hearing and disclosure requirements for
LTC policy rate increases or (2) existing law’s rate filing requirements
for individual LTC policies.
Bidders and Proposers
The bill requires state agencies to include in the bid specifications or
request for proposals for a state contract a notice of the bill’s
representation requirements.
Under the bill, a state agency must reject a bidder or proposer that
does not agree to these representations and (1) award the contract to the
next highest ranked proposer or next lowest responsible qualified
bidder or (2) seek new bids or proposals.
BACKGROUND
Long-Term Care Policies
By law, individual or group LTC insurance policies generally provide
benefits for treating an injury, illness, or loss of functional capacity in a
setting other than an acute care hospital (e.g., a nursing home or the
insured’s home) for at least one year after a specified elimination period.
An LTC policy does not include a policy that primarily provides
Medicare supplemental coverage, disability income protection
coverage, or major medical coverage, among other exclusions (CGS §§
38a-501 & -528).
Related Bills
sSB 1269 (File 238), favorably reported by the Insurance and Real
Estate Committee, caps, at 10%, the premium rate increases that LTC
insurers can request but prohibits them from filing a rate increase that
exceeds the most recent calendar year average in the consumer price
index for urban consumers if the policyholder has held the LTC policy
for at least 15 years. 2025HB-07226-R000650-BA.DOCX
Researcher: MK Page 4 4/10/25
SB 1278 (File 284), favorably reported by the Aging Committee,
creates a personal income tax deduction for LTC insurance premiums
and requires LTC insurers, before implementing a premium rate
increase of more than 10%, to hold a public hearing and notify
policyholders about the hearing date and time at least 14 days in
advance.
SB 1420 (File 381), favorably reported by the Human Services
Committee, (1) restricts rate increases for Connecticut Partnership for
Long-Term Care policies by prohibiting the insurance commissioner
from approving rate increases greater than those allowed when the
policy was precertified and (2) prohibits partnership policies from tying
executive compensation to the state’s approval of higher rates for
policyholders.
sHB 7183 (File 520), favorably reported by the Government Oversight
Committee, has substantially similar provisions that require (1) the
insurance commissioner to hold a hearing for any LTC policy premium
rate increase request above 10%, (2) health carriers to give LTC
policyholders at least 14 days’ advance notice of the hearing, and (3)
health carriers to notify LTC policy purchasers of the risk of future
premium increases.
COMMITTEE ACTION
Government Administration and Elections Committee
Joint Favorable
Yea 18 Nay 1 (03/26/2025)